(Bloomberg) -- U.K. house prices kept climbing through November as a drought of new listings drove competition between buyers.
The Royal Institution of Chartered Surveyors expects the trend to continue across the country with rents also likely to rise -- by about 5% per year over the next half-decade -- due to dwindling stock.
Unless supply issues are resolved, “transaction levels may flat-line in 2022 with limited choice proving more significant than any shift in the interest-rate environment for new buyers,” Simon Rubinsohn, chief economist at RICS, said in a report published Thursday.
Increasingly, economists see the Bank of England hiking the cost of borrowing in February but Rubinsohn said this would not halt house-price inflation over the next year, even if it slows.
The report adds to evidence that the housing boom comfortably navigated the end of a tax break on property purchases on Sept. 30. At its peak, the relief offered savings of as much as 15,000 pounds ($20,000).
Demand continues to be fueled by city dwellers seeking more spacious properties further afield, a trend that’s likely to be reinforced as more people work from home due to the emergence of a new strain of coronavirus.
“If omicron proves a threat, demand for houses with gardens in the counties is likely to remain strong,” Dorset-based estate agent Oliver Miles said in the RICS report.
Read more: U.K. House Prices Post Strongest Quarterly Increase Since 2006
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