According to a new Royal Institute of Chartered Surveyors (RICS) forecast, the UK property market is in store for a boom.
RICS expects UK property prices to increase by 25% over the next five years.
Why are property prices in the UK expected to rise?
The reason why RICS predicts property prices to increase essentially comes down to a lack of supply and growing demand.
The number of new buyers entering the market since the beginning of the year has climbed up significantly, while the supply of homes has dropped 12%.
The average stock of houses per surveyor in the UK has dropped to 52 homes, down 12% since the start of 2015, and at the lowest level since records began (in 1978).
Simon Rubinsohn, chief economist at RICS, said:
“There had been some hope that the removal of political uncertainty would encourage more properties on to the market, but the initial indications are that this is not proving to be the case. As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher, with property set to become ever more unaffordable,”
What about government pledges to build thousands of new homes?
Despite all the talk ahead of the general election promising a significant increase in the number of new builds in the UK, members of RICS don’t expect a boost in new supply to be delivered by the government any time soon.
Houses in the UK set to become even more unaffordable
Currently the average property in the UK costs circa £196,000, which is already a bit of a stretch for the majority of people looking to buy their first home.
If the RICS forecast is right, then the affordability problem in the UK housing market is set to only get worse.