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House prices rise again under pressure from 'highly constrained' supply

Data from the Royal Institute of Chartered Surveyors forecast a 6 per cent rise in house prices for the year as a whole.

Clare Hutchison
Thursday 10 September 2015 09:21 EDT
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(Dan Kitwood/Getty Images)

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Britain’s “highly-constrained” housing supply has forced house prices even higher in August and may see further increases in the months to come.

The latest reading of the Halifax House Price Index showed prices were 3 per cent higher between June and August compared to the prior quarter.

The acceleration means annual house price growth now stands at 9 per cent.

A shortage of secondhand properties as well as economic recovery, earnings growth and cheap mortgage borrowing were behind the spurt, said Halifax's housing economist Martin Ellis.

"Strengthening demand and highly constrained supply are likely to mean that house price growth continues to be robust in the short-term,” he added.

Data from the Royal Institute of Chartered Surveyors echoed the findings and forecast a 6% rise in house prices for the year as a whole.

"Many of our members are telling us that they are struggling to replace the stock they have sold," said Simon Rubinsohn, the Institute's chief economist.

"This trend looks like it will continue into next year, however uncomfortable that may be for those looking to enter the market."

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