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House prices rise due to shortage of homes

27 Oct 2015

House prices could rise by as much as 5.6% this year, predicts the Centre for Economics and Business Research (CEBR).

New reports have proposed that a significant lack of homes being put up for sale will elevate prices on the housing market.

The CEBR stated that widening price gaps between different types of houses were creating a tougher property ladder for people to climb.

The price divide between a London flat and a terraced home, for example, has almost quadrupled – the same price gap between two such properties stood at £46,000 in 2000, compared to £176,000 in 2014.

September saw mortgage approvals reach a four-month low, with 44,489 applications approved - down 4.5% compared to the previous month.

However, mortgage approvals in September were still 14% higher compared to the same period last year, data from the leading banks has revealed.

This rise occurred partially due to first-time home buyers acquiring a ‘good deal’, reported the British Bankers’ Association (BBA).