Demand for property in the UK is now at an 11-year high, meaning those considering real estate investment will need to come to the table with adequate financial backing. Prices are skyrocketing as would-be buyers clamour for homes, October's Royal Institution of Chartered Surveyors (RICS) Residential Market Survey revealed. The amount of supply coming onto the market also remains well below demand levels, exerting upwards pressure on values.
The proportion of chartered surveyors reporting price rises in October hit a net balance of 57 per cent. This is the highest total recorded since June 2002 - a fact RICS believes highlights the imbalance of supply and demand and its impact on the market. Surveyors claim that while its positive that Help to Buy is increasing buyer numbers, the lack of new construction is problematic.
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Help to Buy is also affecting the buy-to-let sector, with demand for rental accommodation increasing more modestly than in previous years. Just eleven per cent of respondents told RICS that they had experienced a rise in the number of potential tenants during October. This is the lowest reading in over ten years.
Simon Rubinsohn, RICS chief economist, commented: "It's no secret the housing market is gathering some momentum and that buyer numbers are on the rise right across the country. A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first time buyers are in a position to enter the market. In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and - in order for the market to function correctly - this imbalance urgently needs to be addressed."
The government is working to stimulate building and construction starts have picked-up. However, the UK is still well behind the amount of properties needed to create a sustainable market. This is particularly the case in places like London.
- Monday 18 November 2013