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  1. ITV Report

House prices expected to rise faster than wages over coming years

Credit: PA images

House prices are still expected to increase by around 3.5% per year over the next five years, despite signs that the market has become more subdued recently, according to surveyors.

In an "ominous signal" for aspiring first-time buyers, surveyors anticipate house price inflation will continue to out-pace wage growth, the Royal Institution of Chartered Surveyors said.

The General Election does appear to have prompted more home buyers and sellers to adopt a "wait and see" approach, as the number of new buyer enquiries, the volume of fresh property coming to market and the number of sales agreed all fell in May.

Credit: PA images

Property stock levels remain at all-time lows with an average of 43 unsold homes on estate agents' books.

Over the next 12 months, surveyors expect house sales to pick up, with a net balance of 26% expecting sales activity to increase rather than decrease.

Although the latest survey suggests that uncertainty related to the General Election may have contributed to what appears to have been a disappointing level of transactions in the housing market over the spring, perhaps the most ominous signal emanating from the data released today is that contributors still expect house prices to increase at a faster pace than wages over the medium-term despite the difficulty many first-time buyers are clearly having in taking their first steps onto the property ladder.

– Simon Rubinsohn, RICS