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Get ready for rocketing house prices - UK housing supply just hit a record low

Dec 8, 2015, 14:51 IST

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Britain should brace itself for higher house prices because the key factor as to why prices are continually rocketing is getting worse.

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Mortgage lender Halifax revealed in its latest house price index that housing supply dropped to a new record low.

"New instructions by home sellers fell in October for the ninth successive month (and the 14th in the last 15). This contributed to the stock of homes available for sale declining to a new record low," said Halifax, citing the Royal Institution of Chartered Surveyors' (RICS) for its statement.

This is a big deal because Britain's property prices are rising off the back of too many people looking for a place to buy, compared to the amount of available housing up for grabs.

For example, prices in the three months to November were 9% higher than in the same three months a year earlier. While this is lower than October's 9.7% rise, it's still a hefty jump.

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In November, house prices fell 0.2% but this barely dented the overall year-on-year rise in house prices.

Just take a look at house prices over the last year:

Halifax

"Solid economic growth, rising real earnings and falls in already very low mortgage rates have combined to stimulate housing demand this year," said Martin Ellis, housing economist at Halifax.

"The increasingly acute imbalance between supply and demand is causing prices to rise at a robust pace. A situation that is unlikely to reverse significantly in the short-term."

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