The latest Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) has confirmed that house prices are continuing to rise, with a combination of falling stock levels and unprecedented buyer interest resulting in rapidly rising sales figures.
This means we've still got a clear supply/demand imbalance, ensuring prices will continue to rise as the housing market strengthens. In fact, RICS' figures show that pries are expected to rise by an average of 3% over the coming year, and by almost 5% over the next five years, doubling last December's estimate of 2.5%.
This stronger sales climate is largely thought to be the result of the Government's Help to Buy and Funding for Lending schemes, with more surveyors expecting house prices to rise than at any time since 1999.
Whilst it's positive news for the market as a whole there are growing fears of a housing boom, leading the Governor of the Bank of England (BoE) to warn that the bank will tighten lending requirements if deemed necessary.
However, forecasters at the Council of Mortgage Lenders (CML) predict that activity in the housing market will start to ease back of its own accord after 2015, with an excessive housing boom thought to be unlikely.
This dampening of the market could well happen if the BoE rises interest rates, something that the industry expects to happen in 2015 should unemployment levels fall, which would therefore mean mortgages become more expensive and demand less extreme.
The recent restriction of the Funding for Lending Scheme in terms of residential mortgage lending could add to the slowdown in housing market activity, although it remains to be seen how much of an impact this will have.
Mortgage rates are still expected to remain relatively cheap for some time to come, however, so why not take advantage of the strengthened market?
Check out our pick of the best rates.
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