UK House prices are expected to rise by 4.5 per cent for each of the next five years - a cumulative increase of around 25 per cent according to the RICS.
The culprit over the long term - as it has been in the short term - is a shortage of stock. RICS says demand continues to considerably outpace supply and the number of new instructions decreased in October for the ninth month in succession.
In fact the institution says the supply of new stock to the UK market has been in decline since the middle of 2014, with the number of new instructions only increasing in one of the months since then.
Demand, meanwhile, is strong. Following a small pick-up in agreed sales in September, activity was little changed this month across the UK. This chimes with HMRC transactions data, which continues to see the number of sales rising consistently over the year.
“It’s hard to get away from the issue of supply when it comes to the current state of the housing market. The legacy of the drop in new build homes following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month-by-month basis” says Simon Rubinsohn, RICS chief economist.
“If the five year projections regarding the outlook for both prices and rents is anything to go by, property is set to become even more unaffordable going forward making the Government’s focus of boosting the delivery of new-build homes absolutely critical.”
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