The Royal Institution of Chartered Surveyors (RICS) has warned that the number of houses on the market in the UK is nowhere near enough to keep up with rocketing demand and is calling on the Government for urgent action to address the problem.
The latest survey from the Institution found that sales volumes are running at their highest levels in more than five and a half years as more people flood into the market to snap up properties.
According to RICS, 57 per cent of surveyors reported price rises during October, the highest percentage since June 2002, reflecting the imbalance between supply and demand, and looking ahead, said they expect house prices and sales volumes to edge higher in the next three months.
Meanwhile, demand for rented property is increasing at its slowest pace in over a decade, as more people make the jump on or up the property ladder, the Institution reported.
However, while the new phase of the Government’s Help to Buy scheme, which gives borrowers with deposits as low as 5 per cent help to buy a new-build or existing home, is “widening the net” of people who can get mortgage access, surveyors across the UK are reporting a “problematic” lack of new instructions from sellers.
Critics fear that Help to Buy will inflate a dangerous housing bubble after recent figures showed there were more than 2,384 applications for mortgages totaling £365m in the month following its launch, but the Government insists that the Bank of England has tools in place to prevent this.
The Bank’s Financial Policy Committee, which is monitoring the scheme, will consider whether or not to lower the borrowing ceiling from its current limit of £600,000 if there signs that the market is overheating.