Lack of housing stock blamed for price growth

Lack of housing stock blamed for South-East price growth

The average price of a property in the south-east is expected to rise to over £322,000 by 2011, according to a new study. Research from the Housing Federation indicates that a shortage of housing stock in the region means that property prices will continue to soar over the coming years. The study has also revealed that the number of houses available to rent has dropped by almost a third in six years.

Earlier this month, the Association of Residential Letting Agents (Arla) reported that tenant demand in London is easily outstripping supply. According to Arla, more than six in ten agents have spoken of excessive demand in the capital. Derek Cash, from the Housing Federation, said: "Many more affordable homes are urgently needed to avert the south-east's growing housing crisis. "The lack of sufficient housing supply is pushing house prices up more and more, putting a huge strain on the existing affordable housing stock." According to the Housing Federation, house prices in the south-east are now nine or ten times as much as earnings.

Rising house prices 'surprise' MPC member

Rising house prices this year have surprised the Bank of England (BoE), according to a member of the monetary policy committee.

Kate Barker has told the Daily Telegraph that findings which show house prices are rising faster than earnings 'is a surprise'.

'In the very long run, it is difficult to think of house price growth being perpetually above earnings, unless there's something else going on, like a constraint on supply,' she said.

The Royal Institution of Chartered Surveyors (Rics) recently revealed that house prices rose for the fifth consecutive month in August. According to Rics, newly-agreed sales increased in August, while enquiries from prospective buyers accelerated.

Ms Barker also said that healthy economic growth has left the BoE feeling more comfortable about putting up the base rate. 'This doesn't seem like a situation where what you're most worried about is growth falling away,' she added.

House Prices Rise by 6%

House prices for the month of July rose by six per cent, with prices in England doubling in four years to an average of over £200,000 a home. Official government figures published yesterday indicate that growth in house prices is now at its fastest rate in 14 months, and increases in London, Scotland, Wales and Northern Ireland are exceeding the national six per cent average.

The report from the Department for Communities and Local Government (DCLG) shows that the average UK house cost £194,454 in July, compared to £191,016 for the month before. While prices in London rose by 7.1 per cent in the month, while the annual figure in Northern Ireland stands at 18.3 per cent, with the average property selling for £158,104. A similar picture is emerging across all regions of the country.

The average English home now costs £202,660, double what it did in the first six months of 2002. In Wales the average house now sells for £156,205, while in Scotland the figure is £140,460. While the Bank of England's monetary policy committee seeks to slow inflation, with a further rate rise from 4.75 per cent predicted for October or November, first time buyers are struggling with the rising cost of the average first home.

Milan Khatri of the Royal Institution of Chartered Surveyors said: "House price rises for first-time buyer properties fell back in July, but at 5.6 per cent is still running above average wage rises, increasing difficulties for would-be buyers."