Only one way for house prices to go – and that’s inexorably up

House prices are continuing to climb – and are predicted to continue to do so unabated.

Both the RICS and LSL/Acadata reported on the housing market this morning, with the latter’s figures showing that average prices have been propelled closer to the £300,000 mark by the latest rises.

A third market commentator, the website Home, said that the national portfolio of property for sale has shrunk to a new record low.

Home said there are 45% fewer homes for sale now than in November 2007.

But while demand is outpacing supply and pushing prices up, it is a different story in the prime London market after Stamp Duty Land Tax became so much more costly for homes costing £1m upwards.

Winkworth said slow sales in the prime London market will mean that profits this year will be “slightly below” market expectations”. It blamed the Stamp Duty changes as “undermining demand for more expensive properties” but added that “this will still be the second best ever year for Winkworth, despite transactions still being 26% off their historic peak”.

RICS economist Simon Rubinsohn said: “Property is set to become even more unaffordable going forward, making the Government’s focus of boosting the delivery of new homes absolutely critical.”

He said it was “hard to get away from the issue of supply when it comes to the current state of the housing market”.

The RICS said house prices had risen across all parts of the UK, with new listings in decline since the start of the year.

The LSL/Acadata report says house prices jumped an average of £2,500 in October, equal to £80 a day, to reach a tenth record high this year.

It said prices continue to be driven by London, where price rises averaged £24,636 in the last year – equal to 75% of a typical Londoner’s salary.

It also said that it had been the strongest October for sales since 2007.

The LSL/Acadata index puts the average house price in England and Wales at £288,421, up 0.9% on the month and a rise of 5.2% over the year.

Taking London and the south-east out of the equation, it says house price inflation over the rest of England and Wales has been 3.9% in the last year.


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