London will lead U.K. house-price gains next year as demand increases and the number of homes being put up for sale stagnates, the Royal Institution of Chartered Surveyors said.
Values in the capital will rise 11 percent compared with an 8 percent increase nationally, London-based RICS said in a statement on its website today. All regions tracked by the property researcher will post gains, it said.
The Bank of England diluted a credit-boosting program last month to head off a potential housing bubble. RICS said that while the property market should see a “nascent pick-up in activity,” it will be insufficient to meet “burgeoning” buyer interest.
“While the number of new homes being built is now on the rise, it still won’t be anywhere near enough to meet demand,” Peter Bolton King, RICS global residential director, said in the statement. “We expect the problem of insufficient housing stock to be the main driver behind price increases over the next 12 months.”
The number of national housing transactions will increase to 1.2 million in 2014 from 1.05 million this year, RICS said. That’s still below the 1.67 million transactions in 2006 prior to the financial crisis, it said.
Homebuilders will break ground on close to 155,000 new homes in England next year, up from this year’s 125,000, RICS said.
“While this is an encouraging trend, it is still insufficient to address the more rapid growth in population and will leave significant shortfalls,” RICS said.
Northeast England and Northern Ireland will see the smallest price gains next year with increases of 5 percent and 4 percent respectively, it said.