UK House Prices Jump as RICS Doubles Forecast for 2015 Gain

The Royal Institution of Chartered Surveyors said U.K. house prices will rise twice as fast as it previously anticipated this year as a shortage of properties widens the imbalance between supply and demand.

Values will increase 6 percent in 2015, up from 3 percent predicted at the start of the year, RICS said on Thursday in London. Its monthly house price index rose to a 15-month high of 53 in August from 44 the previous month. A separate report from Halifax showed values jumped the most since May 2014.

“Given current market conditions, the latest data unsurprisingly show house prices continuing to rise, and at an accelerating pace,”

said Simon Rubinsohn, chief economist at RICS. “There is good reason for this trend to be sustained into next year, however uncomfortable that may be for those looking to enter the market.”

While demand has been volatile over the past 18 months, RICS said the most striking aspect of the market has been the worsening supply picture. Its measure of the average amount of stock at real-estate agents is the lowest in more than 30 years, and there’s no reason to believe this will change in the near term, according to RICS.

The report from Halifax, the mortgage lending unit of Lloyds Banking Group Plc, provided more evidence that a shortage of property for sale is putting upward pressure on values. The average cost of a home jumped 2.7 percent in August to an average 204,674 pounds ($314,000), it said.

“The underlying pace of house-price growth is strong,” said Martin Ellis, a housing economist at Halifax. “Strengthening demand and highly constrained supply are likely to mean that house-price growth continues to be robust in the short term.”

Another report from Acadata on Thursday showed house prices recorded the biggest monthly increase in a year in August.