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Rightmove Forecasts 8% Increase In UK House Prices Next Year


Asking prices for a property in the U.K. could rise by up to 8 percent next year unless the growing demand is countered by sufficient supply, online real estate portal Rightmove said Monday.

The market needs to redress 2013's imbalance of 2 percent rise in new listings versus 13 percent jump in transactions, the firm said in a monthly report. It also noted that the time-lag between transaction growth and new listing growth has led to a further squeeze on property supply.

Rightmove forecasts that with confidence and mortgage lending at five year highs, property transactions could surge as much as 10 percent to hit around one million in 2014.

In December, house prices fell 1.9 percent month-on-month to GBP 241,455. This was the smallest December fall since 2006. This outcome indicates that the housing market recovery is gaining momentum, the report said.

Year-on-year, prices increased 5.4 percent. Prices in London could rise by another 6 percent and the South East by up to 10 percent due to the London ripple effect, Rightmove said.

Rightmove Director and housing market analyst Miles Shipside said that he does not see a housing bubble forming in London due to Help to Buy, the government-backed mortgage guarantee scheme for existing homes.

"Agents report low take-up of phase two of Help to Buy in London and the South East as mortgage repayments for many properties are not affordable for buyers with only a 5 percent deposit," Shipside said. "It seems to be helping those it was targeted at and those expecting a Help to Buy London bubble have got it very wrong."

The Bank of England last month decided to halt the Funding for Lending (FLS) scheme for household lending as house price growth gathered pace, but said will focus the scheme's firepower on small businesses.

BoE Governor Mark Carney said last week that he is concerned about potential developments in the housing market.

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