UK surveyors report biggest house price rises in almost a year

British house prices rose at their fastest rate in almost a year last month, making the cost of buying a home “ever more unaffordable”, a body representing property valuers said on Thursday.

The Royal Institution of Chartered Surveyors said its monthly house price balance jumped to +40 in June from +34 in May, the highest since July 2014 and a bigger rise than most economists polled by Reuters had expected.

Cheaper mortgages and strong job markets in London and central England were driving demand from buyers, while the number of people looking to sell remained static, RICS said.

“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,” RICS’s chief economist Simon Rubinsohn said.

Another reading of British house prices, compiled by lender Halifax and published on Wednesday, also showed prices rose more strongly than forecast by economists in June. But last week, rival mortgage lender Nationwide said prices fell from May.

Rubinsohn said that house prices and rents were likely to rise significantly faster than wages over the medium term.

RICS also said cuts to housing benefit payments announced in finance minister George Osborne’s budget on Wednesday were likely to force more people into public and not-for-profit housing schemes at a time of existing shortages.

A lack of homes for rent as well as to buy was likely to reduce people’s ability to move to find work, damaging Britain’s broader economic productivity, RICS said

“We need a coherent and coordinated strategy to increase supply,” RICS’s policy chief Jeremy Blackburn said.

Source: Reuters

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