The Conservative party, assuming it is able to form a new government, is being urged to make tacking the growing housing crisis an issue of primary importance once the election dust clears.
The latest survey from the Royal Institution of Chartered Surveyors (RICS) shows that the monthly property price balance dropped to +17 in May from April’s +22, marking the lowest rate of growth since August 2016.
With economic and political uncertainty continuing to grow, and real wages expected to keep falling as weak pay rises are outstripped by inflation, UK home price growth is generally expected to slow further in the near term, as buyer confidence and affordability levels are squeezed.
However, with the number of new homes coming onto the market falling significantly below the level needed to meet demand, as reflected by the findings from the latest RICS survey, Britain’s housing shortage is rapidly approaching crisis point, with the number of prospective buyers dramatically outweighing the volume of homes on the market, which in turn is expected to place upward pressure on home values in the medium to long term
According to RICS, the overwhelming majority of its members expect house prices across Britain to rise by an average of 3.5% a year over the next five years, primarily as a result of the housing shortage.
Simon Rubinsohn, RICS chief economist, commented: “Perhaps the most ominous signal emanating from the data released today is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first time buyers are clearly having.”
Although the housing market has been flatlining for a while now, particularly in London and the South East, Richard Sexton, director at e.surv, is among those urging the government to do more to boost housing supply in order to prevent property prices from spiralling out of control.
He said: “The government has to make sure that housing is a top priority. The UK’s housing stock has been stagnant for too long and if more affordable homes aren’t built, things will only get worse.
“We urge the government to start working closely with the industry to give more people the opportunity to become homeowners.”