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House prices continue to grow

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House prices continue to grow

Increasing demand, together with the continued shortage of homes, means house prices and rents are still rising, according to the Royal Institution of Chartered Surveyors (RICS).

This has prompted the organisation to call for planning reform, as well as an improvement in the environmental quality of the existing stock through a retrofit programme.

According to the regular survey by RICS, it was a slow start to the year in January, but in February there were indications of house price inflation maintaining momentum.

Looking further ahead prices are predicted to climb over the coming year, as surveyors anticipated a rise, with the whole UK expected to see an increase in prices.

In the lettings market, respondents cited an increase in tenant demand in the three months to February and an expectation that rents will rise over the coming year.

This is expected to occur across all parts of the UK, except London, where respondents predict they will remain the same.

Simon Rubinsohn, RICS chief economist, says: “The measures announced last week by the chancellor should help support the housing market over the coming months with concerns around a cliff edge end to the stamp duty break eased.

“However, a very clear message emanating from the latest survey is that more needs to be done to address the shortfall in supply with price and rent expectations very evidently continuing to accelerate.

“Planning reform, which the government is addressing, alongside supporting a sustainable and inclusive recovery in the economy are key elements in encouraging the private sector to increase the pipeline of new build.

“But it is clear that this is only part of the answer, particularly given the impact of low interest rates on demand.

“It is critical that a holistic approach is taken to the housing market ensuring that policy is designed to deliver across tenures and indeed to improve the environmental quality of the existing stock through a retrofit programme.”