Number of new properties failing to keep pace with transactions, with prices in London expected to rise by another 6%.
Property prices are set to continue to increase briskly from 2013 – 2014 stats, with housing website Rightmove predicting that they could rise by as high as 8% in 2014.
If this happens, property price rises would actually be moving quicker in 2014 than they are now, with a hastening of house sales and inflation cited as the primary reasons.
Market commentators have warned that a lack of house building to match soaring levels of demand are currently inflating prices as calls for new vigour in this area grow.
“There’s a listing gap to fill. While sales transactions are up 13% so far in 2013, the number of newly listed properties is only up by 2%,” said Miles Shipside, Rightmove director and housing market analyst. Rightmove said prices rose 5.4% this year.
Rightmove’s most recent monthly data sheet indicated that the average property price this month is £241,455, which is actually 1.9% less than it was back in November. However, Rightmove have identified that this is a typical occurrence at this time of the year with buyers less likely to part with their money in the winter than they are at other times.
The organisation also said outlined that 90% of properties currently on the market would rise in price in the year with homes in the South of England such as Bath, Cambridge and Oxford all set to top the charts on regional increases.
In the North, Leeds and Manchester were identified as the areas that would experience the highest price boosts during the this year, though it has been predicted that there will be a significant disparity in the size of these rises between city and suburban areas.
Londoners will continue to be faced with steep price hikes with a 6% rise expected for this year and Rightmove have predicted that this will mean the entire South East would see a 10% increase due to the ‘”London ripple effect”.
“As the momentum of recovery increases, areas with the largest shortages of fresh property supply are likely to see more substantial price rises, with the south-east among the regions where listings are most scarce,” Shipside said.
“The strength of the market recovery will remain patchy however, with average incomes, employment and regeneration levels having a major say both north and south,” he said.
The data is the latest piece of evidence to suggest that perhaps the property market is moving too fast, with many believing that the rate of supply has to be addressed swiftly before a potential ‘housing bubble’ could manifest in reality.
Last week, Bank of England governor, Mark Carney, announced that he would be focusing their ‘funding for lending’ scheme away from the property market and into small business lending due to fears of housing landscape ‘overheating’.
However, despite this, Shipside have downplayed any concerns, arguing that the chances of any bubble occurring soon are very slim.
“With Help to Buy encouraging more lenders to offer mortgages to those with 5% deposit, the scheme appears to have had a successful start in creating the framework for a return to a normal, functioning higher loan-to-value mortgage market,” he said.
“Agents report low take-up of phase two of Help to Buy in London and the south-east as mortgage repayments for many properties are not affordable for buyers with only a 5% deposit. Take-up appears to be greater the further north you go, so it seems to be helping those it was targeted at and those expecting a Help to Buy London bubble have got it very wrong.”