U.K. Housing Boom Rages With More Buyers Chasing Fewer Homes
U.K. house-price inflation showed no sign of cooling in May as strong demand and a growing supply shortage added fuel to a red-hot market.
In a report published Thursday, the Royal Institution of Chartered Surveyors said the squeeze helped push up prices already buoyed by a temporary tax cut on purchases and pent-up savings. The gap between buyer inquiries and sale instructions ballooned to its widest since 2013.
Prices rose in all regions, with “exceptionally sharp” readings in Northern Ireland, the South West and North West of England, as well as Wales. Real-estate agents anticipate prices will continue to climb over the next year, despite the phasing out of the stamp-duty holiday from the end of this month.
“With the economy performing better than could have been expected even a short while ago and the cost of money still at rock-bottom levels, the principal drivers supporting demand will remain in place,” said RICS chief economist Simon Rubinsohn.
The boom is now raising concerns at the Bank of England, where Chief Economist Andy Haldane this week became the latest policy maker to sound the alarm with a warning that surging house prices are worsening inequality. Values jumped by almost 11% in the year through May, their fastest pace since 2014, according to Nationwide Building Society.
Here’s a roundup of comments made by agents in the RICS survey:
James Perris -- De Villiers in London
“Remains a two-tier market with agents reporting very strong demand outside central London although prime area still suffering from the lack of overseas buyers.”
Chris Gooch -- Carter Jonas in Winchester
“With supply tight, prices are increasing, especially for country housing and we expect this to continue despite the [tax] holiday phasing out.”
Jeff Cole -- Cole Rayment and White in Cornwall
“Stock levels remain low and this is making life difficult for those who fancy moving but have so little choice, so end up putting it off for the time being. The next couple of months will be interesting.”
Jan Hytch -- Arnolds Keys in Norwich
“Lack of supply has led to an increase in competitive bidding with many properties going to ‘best and final’ offers over asking price.”
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