THE CHRONIC lack of supply in Britain’s housing system will drive the market again in the year ahead, pushing property prices even further ahead of wage increases.
The Royal Institution of Chartered Surveyors (RICS) today reveals their forecasts for the housing market in 2014, projecting prices to climb by another eight per cent. In comparison, the Office for Budget Responsibility expects average earnings to rise by only 2.6 per cent next year.
RICS suggest that house prices rose by around five per cent in total this year, with just over a million transactions, expecting another 1.5m in the new year. But this is still below pre-crisis levels. London will take the lead again, with prices forecast to soar by11 per cent.
Housing starts are expected to rise to 155,000, a 30,000 increase on this year, but the figure is still far below the 300,000 level suggested by the Future Homes Commission.
“While the number of new homes being built is now on the rise, it still won’t be anywhere near enough to meet demand and we expect the problem of insufficient housing stock to be the main driver behind price increases over the next twelve months,” concluded Peter Bolton King, RICS global residential director.