"It's no secret that we are seeing prices go up in many parts of the country, driven largely by the lack of properties coming onto the market"
- Peter Bolton-King, RICS global residential director
While the Pound soared most in three months amid speculations the Bank of England will fail to keep interest rates low and will start raising borrowing costs sooner-than-expected, the housing market performed the similar rally. A more than a four-year low in housing for sale boosted Britain's home prices in January, the Royal Institution of Chartered Surveyors monthly housing market survey showed on Thursday.
The house-price balance for January eased to +53% from +56% a month earlier, while analysts expected a +57% reading. This figure represents the percentage of respondents reporting a price hike in their designated area during the corresponding period. Any figure above 0.0% indicates more price increases were registered rather than drops in values. The combination of increased mortgage availability as well as a sharp decline in the supply of housing for sale meant that domestic demand for property remained strong in the first month of this year. At the same time, the number of homes available for sale fell to 59% over the period– the lowest level since mid-2009 and lower from December's reading of 60.4%.
While prices are still below the pre-recession peak, they are rapidly moving towards this level and constantly declining supply can lead to another housing bubble that can derail economic growth.
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