Housing set to become more unaffordable, according to new survey

A shortfall in housing supply in the face of rising demand has pushed up property prices across the UK for the third consecutive month, according to the latest RICS UK Residential Market Survey.

It expects house prices to rise by 4.5% per annum over the next five years, leading to a cumulative increase of around 25%.

The survey said 49% more chartered surveyors saw house prices rise in October, compared to 44% more in September.

East Anglia saw the fastest rises over the last three months and 91% more chartered surveyors reported seeing a rise rather than fall in prices in the month.

However, only 25% more chartered surveyors saw prices rise in London over the last three months.

Only 5% more are expecting a rise in prices in the capital over the next three months.

Demand from potential buyers also grew across the country, with 12% more respondents seeing a rise in new buyer inquiries.

It continues to considerably outpace supply, with sales instructions continuing to fall for the ninth month in a row.

However, the survey noted sales activity was relatively healthy and following a small pick-up in agreed sales in September, activity was similar in October in line with Her Majesty’s Revenue and Customs’ transaction data, which continues to see the number of sales rising consistently over the year.

RICS chief economist Simon Rubinsohn said it is hard to get away from the issue of supply when it comes to the current state of the housing market.

“The legacy of the drop in new build following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month by month basis.

“If the five year projections from members regarding the outlook for both prices and rents is anything to go by, property is set to become even more unaffordable going forward making the Government’s focus of boosting the delivery of new homes absolutely critical.”