Surveyors are predicting UK house price increases of 8 per cent next year.
In its annual housing market forecast, published today, the Royal Institution of Chartered Surveyors has predicted double-digit growth in London (11 per cent), the East Midlands and the East of England (both 10 per cent) in 2014.
It has also predicted house price growth in all areas of the UK next year, including areas which have suffered bad declines in recent years, including Northern Ireland (4 per cent), Wales (7 per cent), the North East (5 per cent) and Scotland (7 per cent).
The professional body says “burgeoning” buyer demand coupled with the “sluggish” supply of new homes will drive house price growth.
RICS global residential director Peter Bolton King says: “The cost of a house is now picking-up right across the country and next year should see more of the same. 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 twelve months.”
RICS forecasts the number of housing starts to grow from roughly 125,000 in 2013 to 155,000 in England next year, although it believes this will not be enough to curtail house prices.
Moreover, the professional body predicts the number of housing transactions to grow from just over 1 million this year to roughly 1.2 million next year.
RICS says mortgage rates are likely to increase towards the end of next year, which is likely to contain house price inflation and transactions in 2015.