House prices are rising due to demand out leveling supply. Fewer properties are coming onto the market where housing demand is already considered to be short of demand. This is happening at a time when there is an expected boost from buyers, especially first time buyers looking for starter homes. There are programmes in place to assist first time buyers, a revision to the stamp duty, and low interest rates being offered by lenders. All of these factors are expected to be an attractive combination set to bring buyers into the market.

For the sixth month in a row, surveyors reported a decline in house prices in London for February, yet in other areas there were increases according to the Royal Institution of Chartered Surveyors (RICS). The declines in London are not expected to remain with forecasts showing an increase in pricing by 30% over the next five years.

The upcoming elections do not seem to be impacting the housing market as expected. Overall house growth increase of 2.4% for the next 12 months was predicted by surveyors. This is an increase of 1.8% over January.

RICS chief economist, Simon Rubinsohn, said, “It is encouraging that the negative trend in buyer inquiries appears to be dissipating, perhaps in part because of growing confidence that the cost of borrowing will stay lower for longer, but more worrying that instructions to sell property continue to drop.

“This very modest reversal in the demand picture is already being felt in the key measures of price expectations highlighting the extent of the challenge policymakers will face in addressing the housing crisis in the aftermath of the coming general election.”