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Housing market dying down


The rapid growth in demand within the housing market is dying down according to the Royal Institution of Chartered Surveyors (RICS).

Although better mortgage deals have helped to satisfy some “pent-up demand” in recent months, leading to an increase in the number of house sales being completed, this surge in demand is “gradually exhausting itself.”

Simon Rubinsohn, Chief Economist at RICS said that "The growth in buyer numbers that we've seen for some months started to slow down in February, as the surge in interest sparked towards the end of last summer began to level off."

"While this certainly doesn't mean an end to the increasing activity we've been seeing recently, it does suggest that the pent up demand generated throughout the downturn is gradually exhausting itself."

Rising House Prices

However, Mr Rubinsohn said that while increases in demand might be showing early signs of slowing down, it’s still likely that prices will continue to rise as there are still too few properties coming on to the market.

According to regular surveys conducted by RICS, the average cost for a home in the UK has risen for 11 consecutive months. Additionally, the Office for National Statistics (ONS) released figures in February which saw the average price of a UK home hit £250,000 for the first time, as prices increased by 5.5% in 2013.

Not all reports suggested house prices were as high as this just yet, but the general consensus is that house prices will continue to rise for the foreseeable future. For example, a report from the Nationwide Building Society claimed that the average UK home is now worth £177,846, much less than the figure suggested by the ONS.

However, the report from Nationwide Building Society suggested that house prices were actually rising faster than what the ONS suggested, as they claimed that house prices increased by more than 9% annually.

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