House prices rising 'because of shortage of supply'

Posted: 17 Dec 2009 11:56:11 GMT

The main reason for the current rise in house prices is because the market supply of properties is not keeping up with demand, states one industry expert.

Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors (RICS), says that the imbalance between supply and demand that was seen earlier in the year is still there.

His comments come in response to a recent RICS UK Housing Market survey, which revealed that for the sixth consecutive month more chartered surveyors have reported a rise in the number of new instructions.

Mr Rubinsohn goes on to add that one of the factors that could be holding back supply is the current uncertainty in the market, as many people are unsure about their ability to sell a property in these troubled economic times.

According to Countrywide Mortgage Services, improved lender confidence and competition between mortgage providers has pushed down the average interest rates on home loan products.

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