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House prices rise as demand increases


A report from the Royal Institution of Chartered Surveyors (RICS) has shown that a further drop in the number of people selling their homes has pushed house prices even higher.

The report shows that the number of people selling their homes has fallen, whereas the amount of people looking to buy a new house has remained the same, leading to a rise in house prices.

The number of homes being sold has fallen for the eighth time in the past nine months, the fastest rate since May 2009. The RICS has now predicted that this trend will continue over the next 12 months, pushing house prices even higher.

Simon Rubinsohn, Rics chief economist, said:
"It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices, but it is doubtful that this will be substantive enough to provide anything more than temporary relief.

"Alongside an increased flow of second hand stock, it is absolutely critical that the new government focuses on measures to boost the flow of new build."

People in the industry have claimed that not enough houses are being built in the UK to keep up with the rising population. Jeremy Blackburn, head of policy at Rics, has now warned that the UK is facing a national emergency in regards to house prices. He said:

"The last time we were building 300,000 homes was in 1963 under Harold Macmillan's Conservative government, which utilised both public and private building.
"We need a coherent and coordinated house building strategy across all tenures.

"Introducing demand-side measures, such as extending 'Right to Buy', will not see the Conservatives deliver on their promise of one million homes by 2020."

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