UK house prices rose at the fastest pace in a year in July – and could speed up this year
British house prices rose at their fastest rate in a year last month, while the gap between supply and demand means they could speed up this year.
The Royal Institution of Chartered Surveyors (Rics) monthly house price balance rose to +44 in July, from +40 a month earlier. This was the highest since July 2014 and also exceeded most economists' expectations.
Buyers reported the highest demand for houses in six months. But homeowners said they were reluctant to move, due to the scant choice of available properties, also squeezing supply.
Read more: Union RMT wants pay rises in line with house price growth
"A renewed acceleration in house price inflation allied to a fairly flat trend in sales activity highlights the very real challenges being presented by the housing market," Simon Rubinsohn, Rics chief economist, said.
"More worrying still is the suspicion that the imbalance between supply and demand will lead to even strong price gains over the next twelve months."
The "renewed acceleration" in house price growth comes as transport union RMT demands pay rises in line with rent rises and/or house price growth. This was one the many demands it made over the Night Tube. But for most people, the higher prices will make it even harder to trade up, or buy a first home.
Read more: No end in sight for London house price boom
Rics blamed poor government policies for the difficulties facing the housing market. They make it easier for new buyers to get onto the property ladder, instead of increasing supply by building more houses.
"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," Jeremy Blackburn, Rics head of policy, said.
"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."