Housing market: Lack of supply ‘pushing up prices’
Mortgage activity has picked up this year but the lack of homes for sale is likely to push up house prices, reports have suggested.
The Centre for Economics and Business Research (CEBR) predicts house prices will rise 5.6% this year, higher than its previous forecast of 4.7%.
A lack of properties being put on the market was pushing up prices, it said.
This comes despite a 14% rise in mortgage approvals for house purchases, according to the major banks.
The British Bankers’ Association (BBA) said that the rise in September compared with a year earlier was partly due to first-time buyers being able to find a “good deal”.
However, the 44,489 mortgage approvals for house purchases in September was down 4.5% on the previous month.
The CEBR said price gaps between different property types were widening, making it harder for people to climb up the property ladder.
In London, someone who wanted to move from a flat to a terraced home would need to find an extra £176,000, it said.
It called on the government to extend its current housebuilding programme, claiming that prices would continue to rise – by 3.5% in 2016, and by around 4% in the four years that followed.
Housing charity Shelter has warned that further house price rises will “push the goal posts even further away for those hoping to become homeowners”.