House prices are expected to further soar thanks to increasing construction costs.
Annual house price growth eased to 10 per cent in September, from 11 per cent in August, according to Nationwide Building Society.
London was the weakest performing area of the UK in the third quarter of 2021 while the average UK house price hit £248,742.
“This is still exceptional growth given the economic trauma that the UK has been through,” Anna Clare Harper, CEO of property consultancy SPI Capital, said.
“With rising construction costs, it’s likely that the UK continues to suffer from a shortage of housing stock, which in turn means prices are expected to continue to grow,” Harper said.
The construction sector has been hit by a tight availability of materials and rocketing costs. Goods including timber, wheelbarrows, insulation and adhesives have risen in price, against a backdrop of worker shortages.
Building projects have been hit by a cocktail of coronavirus restrictions, delays after Brexit and shipping hold-ups.
“In the last 18 months, lockdown has inspired a huge rise in homeowners’ desire to upgrade their surroundings through refurbishments and extensions. Meanwhile, Brexit- and Covid-related supply issues, labour shortages and pressure on logistics and deliveries have limited what is available,” Harper explained.
“It’s not an easy time for those in charge of building projects of any scale, from a simple refurbishment to larger multi-unit development schemes. The combined forces of growing demand and short supply have created unanticipated delays in even the best-planned projects.”
A snapshot from IHS Markit and the Chartered Institute of Procurement and Supply (Cips) laid bare a decline in growth across housebuilding, commercial work and civil engineering for the construction industry in August. The index posted a score of 55.2 in August, down from 58.7 in July. House building recorded a rating of 55.
In August, the property market was said to be experiencing its greatest stock shortage since 2015, according to Zoopla. However, there are signs a high ratio of buyer demand to properties for sale has eased up.