Lack of supply driving up house prices

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HOUSE prices in the North West continue to be squeezed higher by growing demand and contracting supply, according to the latest Royal Institution of Chartered Surveyors UK Residential Market Survey.

While 61 per cent more chartered surveyors in the North West saw house prices rise in July, supply to the market continued to decline with more respondents reporting a drop in new instructions.

In July, the average number of properties for sale per surveyor in the North West slipped to a record low at 63; whereas at the end of last year (Dec 2014) surveyors in the region had 104 properties for sale on their books.

Consequently, 50 per cent of North West respondents expect to see further house price gains over the next twelve months. Most areas of the UK are also projected to see house price growth over the coming year with confidence most elevated in East Anglia and Northern Ireland.

Despite rising prices in the North West, interest from potential buyers has not dampened, with 35 per cent of respondents reporting a rise in new buyer enquiries.

Jeremy Blackburn, RICS Head of Policy, pictured, said: “This government has put home ownership at the very heart of its agenda, with Starter Homes and extending Right to Buy the strongest evidence of that ambition. However, this continues to be demand driven and fails to address the real issue of supply.

“A coherent and coordinated house building strategy is required across all tenures. This should include measures that will kick-start the supply-side, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing.”