- House prices have soared in London and across Britain over the past year
- Royal Institution of Chartered Surveyors says houses now exceed buyers
- Prices likely to rise for 12 months but then fall, bringing surge to an end
Britain's house-price boom threatens to turn into a property crash within months, warn industry experts, as a key survery is set to reveal there are now more sellers that buyers.
House prices have soared in the past year, especially in London.
But a survey from the Royal Institution of Chartered Surveyors (RICS) is this week expected to indicate that the numbers of houses on the market now exceeds the number of buyers.
Prices are likely to rise for a further 12 months, but RICS expects them to fall after that.
The Nationwide building society says properties in London are now 26 per cent dearer than they were a year ago and price rises have been seen across much of the country.
But there has been mounting evidence that the surge has come to an end.
Sellers are looking to cash in on high prices, creating a glut of homes for sale. Buyers, meanwhile, are said to be wary of paying huge prices for London properties in particular.
With a rise in interest rates expected before the end of the year, some have argued now is a bad time to be buying property, and that once the cost of mortgages goes up, prices will have to come down.
The last time RICS published its figures, buyers were still outnumbering available stock, indicating that house prices across the country would continue to grow.
But the number has been falling sharply in recent months, prompting speculation that it could head into negative territory when RICS releases figures for July on Thursday.
The regional figures for London indicate that the number of new sellers already hugely outnumbers new buyers.
House-price growth has slowed in the capital in recent months, with estate agents talking of prices having reached a plateau.
Figures from estate agency chain LSL Property Services show that home sales across the country are starting to pick up.
Property transactions have been stuck at low levels for several years, exacerbating a shortage in the supply of homes.
David Newnes, director of LSL’s Your Move estate agency chain, said: ‘Overall, 90,000 properties were sold across England and Wales in July, up 21 per cent on a year previously and representing the highest monthly total since November 2007.’
The Bank of England earlier this year also acted to rein in excesses in the mortgage market, restricting the amount of lending banks could do at high multiples of an applicant’s salary. But the rules are unlikely to restrict lending significantly unless prices soar and salaries stay where they are.
Bank of England Governor Mark Carney said when the changes were announced: ‘These actions should not restrain current market housing activity. These actions will have minimal impact in the future if the housing market evolves in line with the Bank’s central view.’