High demand and low supply keep house prices on upward trend

The latest Residential Market Survey by the Royal Institution of Chartered Surveyors (RICS) reveals that house prices are expected to increase by 4.5% over the next 5 years, as limited housing is unable to keep up with current market requirements. Simon Rubinsohn, RISC Chief Economist, explains how 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." Interestingly, HMRC property transactions were up 6.3% this month compared to last year - indicating that although prices are higher, the market is still busy with determined buyers. In light of market conditions, Halifax now puts the average house price in the South East for Q3 at £296,445, an annual change of 8.8%.