Britain’s housing market is ‘settling down’ after the number of property sales dropped sharply following the Brexit vote, with house prices set to rise steadily for the next five years.
Research published by the Royal Institution of Chartered Surveyors (RICS) found that during August, 12 per cent more respondents nationally reported an increase in house prices, which was up from five per cent the previous month.
A shortage of homes on the market was deemed a key factor in driving up house prices, with a slim selection of available homes set to continue for a while yet.
House prices will increase by 3.3 per cent on average every year until 2021, according to the RICS Residential Market Survey – a monthly sentiment survey of chartered surveyors who operate in the residential sales and lettings markets.
August returned some stability and momentum to house prices after sales fell for four months in a row with a significant drop in activity and price expectations in the wake of the EU referendum, the group states.
It also brought an end to a run of five monthly surveys where the net balance had decelerated (from a high of 50 per cent in February) but it is still the second weakest reading over the past eighteen months.
Simon Rubinsohn, chief economist at RICS, said: “There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum.”
He did point out that buyer enquiries had dipped again in August but only modestly and a more significant takeover was the upwards turn in sales expectations, helped by the Bank of England in helping to support confidence.
According to the latest figures published in June, the average price of a house in the UK was £213,927, one per cent up on the previous month and 8.7 per cent more than in June 2015.