England and Wales house prices finish 2016 on a high

House prices in England and Wales finished 2016 on a high, reveal new figures from LSL Property Services.

Average house prices rose by 0.4 per cent month-on-month in December 2016, which LSL Property Services / Acadata welcomes as proof of the market’s resilience, following a year of stamp duty changes and the EU referendum.

The average price of a house in England and Wales climbed £1,139 to finish the year at £297,678 – 3.1 per cent up year-on-year and just £47 show of an all-time high. Indeed, prices have now almost fully recovered from the peak they reached in March 2016 ahead of the 3 per cent surcharge on stamp duty on second homes and buy-to-let properties that was introduced in April.

The modest annual rise “disguises both the volatility immediately before and after the introduction of the changes in stamp duty, and a massive variation in regional performance”, notes the index. Indeed, Hull led growth with prices up 16.2 per cent, while London’s Borough of Hammersmith and Fulham saw prices fall by 11.5 per cent.

Oliver Blake, Managing Director of Your Move and Reeds Rains estate agents, part of LSL Property Services plc says: “It’s been a strong finish to an uncertain year. Despite the doubts over Brexit, prices have continued to grow, powered by good-value commuter properties. As the lower transaction figures since April show, the market faces challenges ahead, but it enters 2017 a lot stronger than many would have expected.”

 

UK house prices to increase by 3pc in 2017

21st December 2016

UK house prices will increase by 3 per cent in 2017, the RICS forecasts, as sales stabilise but supply remains low.

Indeed, the shortage of supply is at the forefront of all market analysis at end of a dramatic 2016, which has seen a stamp duty surcharge and a EU referendum vote both contribute to a slowdown in activity in the second half of the year. Nonetheless, the shortfall in inventory remains the driving factor behind the market’s performance as the legacy of building on an insufficient scale has left the average inventory on estate agents books close to a historic low.

As a result, the Royal Institution of Chartered Surveyors expects house prices to climb by an average of 3 per cent across the UK. East Anglia is likely to continue its trend during 2016 and alongside the North West and West Midlands is likely to record gains higher than the national average. Meanwhile, prices in Central London look set to stabilise after recent declines, with support provided by the weaker exchange rate encouraging foreign buyers.

“Although recent announcements by the government on housing are very welcome, the ongoing shortfall of stock across much of the sales and lettings markets is set to continue to underpin prices and rents,” says Simon Rubinsohn, RICS Chief Economist. “As a result, the affordability challenge will remain very much to the fore for many. Meanwhile the lack of existing inventory in the market is impacting the ability of households to move and will contribute toward transaction activity over the whole of 2017 being a little lower that in the year just ending.”

The outlook echoes a similar stance from Nationwide’s housing forecast for 2017, which predicts prices will climb by 2 per cent.

 

UK house prices to rise 2 per cent in 2017

20th December 2016

UK house prices are expected to rise 2 per cent in 2017, according to Nationwide.

The lender’s latest report notes that price growth in 2016 has remained in a fairly narrow range of 4 per cent to 6 per cent.

“A number of policy changes made it difficult to gauge the underlying strength of housing demand for much of 2016. In particular, the imposition of additional stamp duty on second homes in April led to a record number of property transactions in March as people brought forward purchases to avoid additional tax liabilities, resulting in an inevitable fall back in activity during the summer,” comments Robert Gardner, Nationwide’s Chief Economist.

“Looking forward, house price prospects will depend crucially on developments in the wider economy, around which there is a larger degree of uncertainty than usual,” he adds. “Like most forecasters, including the Bank of England, we expect the UK economy to slow modestly next year, which is likely to result in less robust labour market conditions and modestly slower house price growth.”

Nonetheless, Nationwide forecasts a small gain is more likely than a decline over 2017 as a whole, with low interest rates fuelling demand and an ongoing lack of supply underpinning price growth.

“In the four quarters to Q3 2016, 142,000 new homes were completed, 33% higher than the low point seen in 2010. However, this is still around 12% below the average rate of building in the five years before the financial crisis and 37% below the 225,000 new households projected to form each year over the coming decade,” adds Gardner.

 

England and Wales house prices recover to pre-referendum levels

14th December 2016

The biggest impact on the housing market this year was not the UK’s Brexit vote, but the stamp duty change in April, reveals new research.

The latest figures from LSL Property Services / Acadata show that despite the vote to leave the European Union, property values in England and Wales continued to rise in November. Prices edged up 0.1 per cent from October, taking the average house value to 3.1 per cent above the same time a year ago.

The average house price in England and Wales, at £295,276, is up £380 on the month and exactly the same as it was in May 2016, marking a recovery to the level immediately prior to the referendum.

The most significant impact on the market this year remains the changes to Stamp Duty in April, with strong price increases up to March 2016, followed by a fall following the change, concludes Adrian Gill, director of Your Move and Reeds Rains estate agents. Since then prices have been broadly flat, despite the Brexit vote.

“For all the talk of Brexit uncertainty, the main factor driving up prices in the housing market is still supply and demand,” adds Gill. “That imbalance remains even after the Government announcements in the Autumn statement.”

 

UK house price growth slows and steadies

1st December 2016

UK house price growth is slowing, but also steadying, in the wake of the vote to leave the European Union.

New figures from Nationwide show that property values slowed their increases once again in November, with prices up 0.1 per cent from October. The average house price is now £204,947, up 4.4 per cent year-on-year, down from the 4.6 per cent annual growth recorded in October. However, the annual growth is still in line with the typical growth rates recorded since the start of 2015, as the underlying fundamentals of the market continue to underpin price rises.

Indeed, mortgage rates remain low, but supply also remains low, encouraging demand but also pushing up values.

“There are some signs that, despite the uncertain economic outlook, demand conditions have strengthened a little in recent months, reflecting the impact of solid labour market conditions and historically low borrowing costs,” comments Robert Gardner, Nationwide’s Chief Economist. “Approvals increased in October, and surveyors report that
new buyer enquiries have increased modestly. The relatively low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight in the quarters ahead, even if economic conditions weaken, as most forecasters expect.”

Borrowers, meanwhile, appear to be diving back into the market, taking what certainty they can to get on the housing ladder. Indeed, fixed rate mortgages remain the most popular, according to Nationwide, with data from the Council of Mortgage Lenders suggests that over 90 per cent of new mortgages were contracted on fixed rates over the past 12 months.

“Fixed rate deals are most popular amongst first time buyers for whom certainty over monthly payments is likely to be particularly important,” says Gardner.

 

House prices up as sales slow

1st December 2016

House prices in England and Wales continue to climb, despite a general slowdown in sales.

Since the UK’s Brexit vote, there has been much speculation about the potential impact of the referendum’s result upon the property market, with a slowdown already evident due to early rush in transactions at the start of 2016, ahead of the stamp duty surcharge deadline.

The LSL Property Services/Acadata house price index indicated “negligible” growth in September, which suggested an entrenched slowdown, but October has since seen property prices record their strongest monthly increase since Q1 2016.

Prices rose 0.4 per cent from September, taking the average property price to £294,351. Annual growth in house prices stands at 3 per cent, slightly below the 3.7 per cent recorded in September.

Transaction volumes, though, continue to be subdued, with “no rebound after the summer slowdown”, says the LSL report. Nonetheless, recent RICS evidence of increased buyer demand in September prompts “some optimism”.

“The market remains unpredictable,” says Adrian Gill, director of Your Move and Reeds Rains estate agents.

Indeed, while annual growth in house prices has weakened in the majority of regions, all remain in positive territory. Some regions also continue to show markedly faster growth than others.

“What has’t changed is an underlying picture of strong demand and inadequate supply,” says Gill. “More and more young adults are living with their parents, but there’s no sign they are less ambitious to get their own place. As the government looks again at housing, it will be a tall order to come up with something that meets the needs of people right across the country.”

Richard Sexton, director of e.surv chartered surveyors, adds: “In some ways, despite a slowdown, the housing market, like the economy, has remained surprisingly resilient since the vote for Brexit. The variety of fortunes in different areas, however, shows the challenge the government faces as it prepares its Housing Policy White Paper, expected this month.”

 

UK house prices stall for first time in 15 months

2nd November 2016

UK house price growth stalled for the first time in over a year this October.

Prices were unchanged month-on-month, according to the Nationwide house price index, with annual growth slowing from 5.3 per cent in September to 4.6 per cent. The average UK house price, according to the lender, is now £205,904, slightly down on the £206,015 recorded in September.

The figures highlight the impact of wider uncertainty upon the market, following the UK’s vote to leave the European Union, in addition to the general market slowdown, following the rush earlier this year to beat April’s stump duty surcharge deadline.

“Measures of housing market activity remain fairly subdued, with the number of residential property transactions c10 per cent below the levels recorded in the same period of 2015 in recent months,” comments Robert Gardner, Nationwide’s Chief Economist. “Policy changes impacting the buy-to-let market may also be playing a role in dampening activity.”

Nonetheless, the fundamentals underpinning the UK housing market remain in place, with sentiment notably improving among the Royal Institution of Chartered Surveyors this autumn.

“Data releases point to fairly stable demand conditions in the near term,” adds Gardner. “Mortgage approvals edged up modestly in September, though they remain weak by historic standards. Surveyors report that new buyer enquiries have increased modestly in recent months. While the economic outlook is uncertain, solid labour market conditions and historically low borrowing costs should provide support to buyer confidence.”

Indeed, agents are now welcoming the transition from a sellers’ market to a buyers’ market.

“One month of stagnant prices is neither a surprise nor a cause for panic – but it is an indication of how much of a buyer’s market it has become,” says Jonathan Hopper, Managing Director of Garrington Property Finders.

“Prices in the immediate aftermath of the referendum were flattered by an injection of pent-up demand as buyers who had sat on the fence in the run-up to the referendum finally got off it. But with the impact of that temporary prop now fading, the buyers who remain frequently hold the whiphand – with many feeling empowered to ask for a substantial discount in return for the certainty of a sale.”

The relatively low supply of homes on the market, meanwhile, in the face of anticipated buyer interest, is expected to continue bolstering UK house prices. Indeed, a recent forecast from JLL says that house prices will rise by 13 per cent in the coming five years.

 

UK housing market moving to a new normal?

17th October 2016

The UK housing market could be moving to a new normal following the EU referendum. The latest LSL Property Services / Acadata index shows that sales continue to slow this autumn, but prices are still rising year-on-year in all regions.

House prices overall edged up by the narrowest of margins in September, with the average value rising £120 over the month to £292,763. While they were essentially flat, the leading regions continued to buck the trend. Prices for the East of England led the charge, up 7.5 per cent for the year, ahead of the South East, up 7.2 per cent, and the South West, up 4.2 per cent. Indeed, on an annual basis, the market is enjoying some stable growth, with prices in England and Wales up 3.5 per cent year-on-year, the equivalent of £9,896.

In a typical seasonal slowdown, transactions fell in September from the previous month to an estimated 74,000 sales, with house hunting interrupted for many by the summer holidays.

“As predicted last month, transactions are at similar levels to – or a little above – those in 2013, and look likely to rise over the coming couple of months as in that year,” comments LSL.

London price trends may well remain confined to the capital, according to LSL.

“There are strong arguments that much of the decline in high value properties is the result of the high stamp duty rates of 10 per cent imposed on properties priced over £925,000, and of 12 per cent for those above £1.5 million. Outside London, this has little impact,” explains the report.

In the regions, the East of England continues to perform strongly with the fastest growing unitary authorities Thurrock (up 1.1 per cent over the month and 16.3 per cent on the year), and Luton (up 2.1 per cent monthly and 15.7 per cent annually), followed by Hertfordshire (1 per cent and 11 per cent) helping it maintain its lead. The South East also continues to record strong annual growth, driven by price increases in Slough (up 14.4 per cent annually), Medway (14 per cent) and Brighton and Hove (13.7 per cent). Yorks and Humber (up 1.2 per cent annually) and the North East (1.3 per cent) were the slowest growing regions.

Adrian Gill, director of Your Move and Reeds Rains estate agents, says: “We’re seeing a two speed market become firmly established as cheaper parts of the capital and the regions record big price increases driven by demand for affordable homes, while prime London property stalls. At the same time transaction levels are showing how much the market has changed, with the number of properties now held by private landlords changing market dynamics. This all creates big challenges for government housing policies, which are going to have to be flexible enough to allow regions to make use of the solutions that work best for their different needs.”

 

UK house price growth slows, as need for supply grows

House price growth is slowing in the UK, according to Nationwide’s latest report, as the lender calls for the country to build more homes.

House prices rose by 0.3 per cent in September 2016 from the previous month, taking the average property value to £206,015 – 5.3 per cent above September 2015, a slower rate of annual growth than the 5.6 per cent recorded in August.

Robert Gardner, Nationwide’s Chief Economist, notes that growth remains within the narrow range of 3 per cent to 6 per cent that has prevailed since early 2015, but highlights that, while media headlines may race to blame Brexit, it is construction that is one of the main factors in the housing market’s slowdown.

“The relative stability in the rate of house price growth suggests that the softening in housing demand evident in recent months has been broadly matched on the supply side of the market,” comments Gardner. “Survey data indicates that, while new buyer enquiries have remained fairly subdued, the number of homes on the market has remained close to all-time lows, in part due to low rates of construction activity.”

Supply is a difficult thing to balance correctly, as a shortage of homes can drive up prices, due to pressure from demand, but a lack of supply for sale can also cause transactions to slow. A healthy balance of supply and demand, meanwhile, would represent steady house price growth, but at an affordable rate.

“The number of new homes built in England has picked up, but is still not sufficient to keep up with the expected increase in the population. In the four quarters to Q2 2016, 139,000 new houses were completed, 30% higher than the low point seen in 2010. However, this is still around 15% below the average rate of building in the five years before the financial crisis and 38% below the 225,000 new households projected to form each year over the coming decade.”

Nationwide admits that there “are signs that more houses are being built in regions where affordability is more stretched”, but that more needs to be done.

“With interest rates expected to remain low and schemes, such as Help to Buy, helping to provide those with smaller deposits access to finance, housebuilders should have confidence that there will be sufficient demand from buyers if more homes are built. The major housebuilders appear to have capacity to expand output, with most reporting land banks that could support around five years’ worth of construction at current rates of building activity. However, there is a risk that the uncertain economic outlook may weigh on activity in the period ahead.”

 

UK house price rise defies Brexit concerns

1st September 2016

UK house prices rose in August, defying any concerns surrounding the impact of the recent Brexit vote upon the property market.

According to Nationwide’s latest figures, property values edged up 0.6 per cent in August to an average of £206,145. That increase takes annnual price growth to 5.6 per cent, slightly faster than the 5.2 per cent recorded by the lender in July 2016, although the lender notes that this is within the range of 3 to 6 per cent that the market has registered since early 2015.

“The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months,” comments Robert Gardner, Nationwide’s Chief Economist.

“New buyer enquiries have softened as a result of the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. The number of mortgages approved for house purchase fell to an eighteen-month low in July.

“However, the decline in demand appears to have been matched by weakness on the supply side of the market. Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to thirty-year lows. This helps to explain why the pace of house price growth has remained broadly stable.”

Gardner says that the outlook for the market remains “clouded”, with the major factor upon performance being the labour market and confidence among prospective buyers.

“It is encouraging that the unemployment rate remained at a ten-year low in the three months to June, though labour market trends tend to lag developments in the wider economy. It is also positive that retail sales increased at a healthy rate in July, up almost 6 per cent compared to the previous year, even though consumer confidence fell sharply during the month.”

Gardner also welcomes the monetary policy measures announced by the Bank of England last month, including the cutting of interest rates from 0.5 per cent to 0.25 per cent.

“The MPC’s stimulus measures will also provide indirect support to the housing market, and not just by boosting wider economic activity. For example, the decision to purchase an additional £60 billion of UK government bonds will put downward pressure on long term interest rates which will, in turn, help to lower the cost of fixed rate mortgages, which have already declined to new all-time lows,” he comments.

 

Optimism returns as UK housing market holds breath post-Brexit

11th August 2016

Photo: SarfLondonDunc

Signs of optimism are beginning to return to the UK property industry, as the housing market continues to hold its breath after the UK’s Brexit vote.

According to the latest LSL Property Services / Acadata index, UK house prices continued to grow by 5.5 per cent in July 2016, although this is significantly down from the 8.9 per cent annual growth recorded in February 2016. On a monthly basis, the market saw a modest gain of 0.2 per cent, or £700. Overall, this means prices at an average of £293,318 – £3,386 below their February peak, but £15,422 above their July 2015 levels.

“The trend in prices remains modest, but upwards sloping,” concludes LSL.

Transaction levels present a similarly complex story. These, too, have slowed, with levels for Q2 2016 20 per cent below the same period last year. However, this is as much as to do with stamp duty as anything else, with the spike in sales to beat the surcharge deadline in April 2016 causing sales to slump in the following months.

“Transaction volumes have grown every month since April and are now well above February levels,” notes LSL. “Moreover, the exceptional sales level in March 2016 more than compensates for the decline since. Overall, for the first six months of each year, we estimate transactions in 2016 at some 4 per cent higher than in 2015.”

“Sales volumes continued to increase in July, but again this still tells us little about the referendum vote, since transactions recorded at the Land Registry for the month mostly relate to offers made by purchasers in June, or even earlier,” adds LSL.

Adrian Gill, director of Your Move and Reeds Rains estate agents, says: “Brexit may well have an impact on the housing market, but it’s not showing yet. Even when it does, there will be positive as well as negative influences on the market, which clearly has some strong long-term drivers for continued house price inflation.”

The latest RICS Residential Market Survey also confirms that price growth slowed in July to its lowest reading in three years, with near-term expectations negative.

Even then, anecdotal reports provided by contributors to the RICS survey suggest both the tax change and the ongoing fall-out from the EU referendum are contributing to the current mood in the market. However, looking into the comments left by members suggests conditions vary markedly between agents. A large portion of respondents note, after an initial wobble, activity has returned to normal, while others “feel Brexit has only had a very modest or negligible impact”.

On a longer-term basis, meanwhile, key RICS indicators improved in July, with both sales and price expectations for the next 12 months returning to positive territory.

“The housing market is currently balancing a raft of somewhat mixed economic news alongside the latest policy measures announced by the Bank of England, which have already begun to lower cost of mortgage finance,” comments Simon Rubinsohn, RICS Chief Economist. “Against this backdrop, it is not altogether surprising that near term activity measures remain relatively flat. However the rebound in the key twelve month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.”

UK house prices hold steady amid Brexit aftermath

28th July 2016

UK house prices are holding steady in the aftermath of the Brexit vote, reveal new statistics from Nationwide.

Property values actually increased by 0.5 per cent in July 2016 from June, despite fears that house prices would fall significantly in the wake of the EU referendum’s result, due to uncertainty and falling sales. Prices rose 5.2 per cent year-on-year in July, little changed from the 5.2 per cent annual growth recorded in June.

However, Robert Gardner, Nationwide’s Chief Economist, notes that the index is based on data at the mortgage offer stage, which means any impact from the vote may not be fully evident in July’s figures, as there is a short lag between a buyer making the decision to purchase a property and applying for a mortgage.

“It will be tempting for commentators to assign any trends in the coming months to the impact of the referendum,” comments Gardner. “Housing market transactions were always likely to soften over the summer after the surge in activity in March, as buyers brought forward purchases of second homes to avoid the stamp duty levy, which took effect in April. Determining how much of any fall-back in activity is the result of the tax changes and how much is due to the referendum will be difficult.”

Indeed, while buyers may delay purchasing a property, sellers may also hold off putting their homes on the market, which could keep the supply of properties for sale at its near 30-year low, supporting price growth regardless of wider trends.

“Housebuilders may react to the uncertainty by delaying construction, even though home building is already failing to keep up with the natural increase in the population,” adds Gardner.

Most of all, the labour market will be “crucial” in determining the demand for property in the months ahead, he forecasts.

“It is encouraging that conditions were robust in the run up to the vote, with the unemployment rate falling to a ten-year low in the three months to May. The decline in long term interest rates to new all-time lows in recent weeks should also help to keep borrowing costs low and provide some support for demand.”

UK house prices rise in June

29th June 2016

UK house prices rose in June 2016, according to the latest Nationwide figures.

The lender’s monthly report arrives in the wake of the UK’s vote to leave the European Union last week. Ahead of the referendum, though, prices continued to climb, with prices up 5.1 per cent year-on-year in June 2016 – faster than the 4.7 per cent annual growth recorded in May 2016. The average price was £204,968, 0.2 per cent up on the previous month.

“The rate of annual UK house price growth has remained fairly stable over the past twelve months, confined to a fairly narrow range of between 3 per cent and 6 per cent,” comments Robert Gardner, Nationwide’s Chief Economist. “This trend was maintained in June with price growth at 5.1 per cent, up slightly
from the 4.7 per cent recorded in May.”

“It has become difficult to gauge the underlying pace of demand in recent months, due to the surge in house purchase activity in March ahead of the introduction of Stamp Duty on second homes on 1 April,” adds Gardner. “It will therefore be difficult to assess how much of the likely fall back in transactions in the quarters ahead is because buyers brought forward purchases to avoid additional Stamp Duty liabilities, and how much is due to increased economic uncertainty following the referendum result.”

Nonetheless, Gardner highlights promising figures from the “robust” job sector, with solid employment growth and the unemployment rate declining to an eleven-year low in April. Combined with borrowing costs at near-historic lows, and estate agents continuing to report a record low number of properties on their books, Gardner forecasts that the higher levels of demand than supply will “provide underlying support for prices even if demand softens”.

UK house prices hold steady – but not for long

2nd June 2016

UK house prices held steady in May, with prices edging up by just 0.2 per cent in May 2016. The latest figures from Nationwide show that house price growth slowed last month to 4.7 per cent year-on-year.

The slowdown arrives after the surge in activity ahead of April’s stamp duty deadline, which means that it is likely that purchases will slow, due to the number of people bringing their transactions forward.

“In the near term, it’s going to be difficult to gauge the underlying strength of activity in the housing market due to the volatility generated by the stamp duty changes which took effect from 1 April,” notes Nationwide’s Robert Gardner.

“Indeed, the number of residential property transactions surged to an all-time high in March, some c11 per cent higher than the pre-crisis peak as buyers of second homes sought to avoid the additional tax liabilities.”

However, the underlying market conditions mean that it is unlikely prices will stay still for long. Indeed, the annual pace of house price growth remains in the fairly narrow range between 3 per cent and 5 per cent that has been prevailing for much of the past twelve months. Healthy employment conditions and low mortgage costs, meanwhile, are expected to fuel a steady increase in demand. Supply, on the other, remains low.

“It is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers,” adds Gardner, “and exert upward pressure on price growth once again in the quarters ahead. According to RICS, the number of properties on state agents’ books was already close to all-time lows on data extending back to the late 1970s.”

UK house price growth slows in April

3rd May 2016

UK house price growth slowed in April, following a surge in activity ahead of March’s stamp duty deadline.

House prices edged up 0.2 per cent in the month of April to an average of £202,436. that took the annual rate of house price growth down to 4.9 per cent from 5.7 per cent in March.

“This slowdown returns the annual pace of house price growth to the fairly narrow range between 3 per cent and 5 per cent that had been prevailing since the summer of 2015,” says Robert Gardner, Nationwide’s Chief Economist. “It may be that the surge in house purchase activity resulting from the increase in stamp duty on second homes from 1st April provided a temporary boost to prices in March.”

“However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead,” he adds.

UK house prices enjoy steady start to 2016

27th January 2016

UK house price growth got 2016 off to a steady start, according to the latest figures from Nationwide.

The lender’s latest house price index shows that house prices increased by 0.3 per cent in January 2016, down slightly from the 0.8 per cent growth recorded in December 2015. The average house price was £196,829, down from the £196,999 recorded in the previous month, but annual growth remained stable at 4.4 per cent, down slightly from December’s 4.5 per cent.

Annual house price growth has remained in a fairly narrow range between 3 per cent and 5 per cent since the summer of 2015. Indeed, after the headwinds of the tougher mortgage restrictions and the general election had passed, the market has grown steadily, with price increases driven by a consistent undersupply of stock.

“As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level,” comments Robert Gardner, Nationwide’s Chief Economist.

Indeed, improving employment figures continue to fuel confidence among buyers, boosting demand and contributing to the ongoing imbalance between supply and demand.

With interest rates now likely to remain at their record lows, following comments from the Bank of England governor Mark Carney, affordable mortgages are expected to continue supporting demand for homes. As a result, the current trend is forecast to last for some time.

“The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability. Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents’ books remains close to all-time lows,” adds Gardner.

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