House prices set to rise 8% due to property shortage

House prices will rise by another 8% next year due to the shortage of homes coming on to the market , surveyors have forecast.

Feeling of pre-2008 'deja vu' in property market

Henry Pryor
The property market is looking very similar to how it looked pre-2008 crash, Henry Pryor said. Credit: DaybreakITV

There is an "extraordinary" sense of "deja vu" in the property market harking back to the housing bubble pre-2008 crash, an expert told Daybreak.

Henry Pryor explained: "We've got a lot of people chasing a finite number of properties - though the Coalition Government should be congratulated on some of the efforts they are making to free up the housing market."

He continued: "There is a great deal of 2006-7 just ahead of the credit crunch that we can see in the market today.

"At the end of the day we have to remember, asking prices may be up, sale prices in some parts of the country may be up, but they are still according to the Land Registry anyway, 10% below the peak of the market in 2007."

Read more: House prices in London up 12% in a year

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New builds 'nowhere near enough to meet demand'

Housing starts are set to rise to 155,000 from 125,000 this year - but will be insufficient to address the more rapid growth in population, RICS said.

We expect all areas of the country to see prices increase, with London, predictably, recording the biggest rises.

The improving economic picture aside, this is largely down to the fact that buyer numbers considerably outweigh the amount of homes on the market.

While the number of new homes being built is now on the rise, it still won't be anywhere near enough to meet demand and we expect the problem of insufficient housing stock to be the main driver behind price increases over the next 12 months.

– RICS director Peter Bolton King said

Read: Property prices set to surge in 2014, surveyors forecast

Property prices set to surge in 2014, surveyors forecast

A shortage of new homes coming onto the market will push property prices up by another 8% next year, the Royal Institution of Chartered Surveyors (RICS) have forecast.

House prices will rise by another 8% next year due to the shortage of homes coming on to the market , surveyors have forecast. Credit: PA

All parts of the country can expect to see prices rise, RICS suggested, with London set for another 11% jump on top of already sizeable gains over the last year.

Based on its recent feedback, RICS said the demand-supply imbalance was the key challenge facing the residential market.

It believes the number of transactions will improve to 1.2 million next year from the estimated 1.05 million this year, although this is still a long way short of the 1.67 million sales seen in 2006.