Britain’s housing shortage just made house prices grow at their fastest pace in five months in March.
Sellers holding off from putting their properties on the market ahead of the May 7, General Election, as well as the overall dearth in available British housing, is causing a big boost to house prices, says the Royal Institution of Chartered Surveyors’ (RICS).
According to the group’s monthly house price balance, the level rose to +21 in March, from +15 in February.
Simon Rubinsohn, RICS’ chief economist said in a statement (emphasis ours):
“The boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back.
“Even more worrying are the tentative signs that price momentum could be set to pick-up once again as the supply of stock to the market continues to fall. Anecdotal evidence does suggest that election uncertainty may be having some impact on the market, but underlying the trends visible in the latest survey is a very real housing crisis which will urgently need to be addressed by the next government.
“It is significant that price expectations nationally are accelerating both at the three and twelve month time horizons and at the latter they are at their highest level since the spring of last year.”
The Confederation of British Industry (CBI) warned last year that 240,000 properties need to be built annually, in order to accommodate rising demand across the country. Unfortunately, over the last 14 years, only 200,000 homes have been delivered annually in four periods.
British property prices have also surged 56% since 2004, and by over 90% in London.
The Office for National Statistics data showed that the average UK house price, excluding London, in January 2015 stood at £208,000. Meanwhile, the average London house price stood at £510,000.
Earlier this week, Prime Minister David Cameron’s Conservative party pledged to help build 400,000 new homes to alleviate the housing shortage across the country. He also promised to allow tenants in housing, which are either partly subsidised by the state or by private non-profit organisations, to buy their homes at a discount.
Britain’s main opposition Labour called the move as a “bribe” to voters.
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