According to findings published by the Royal Institution of Chartered Surveyors (RICS), house price inflation is likely to rise twice as much as the original forecast of 3% published by the body at beginning of the year.
Northern Ireland is expected to account for the highest rate of house price inflation in the UK at 11%, a region which has suffered stagnant growth in recent years as a result of the credit crunch.
More than a third (37%) of members at the surveying body anticipated a rise in house prices over the next three months and 76% over the coming year.
RICS reported a rise in new buyer enquiries for the fifth month in succession, with 22% of its members noticing increased demand. However, this is combined with dwindling new instructions which have pushed average stock levels to record lows.
Michael Hanley, RICS economist, said the body had now lowered its forecast for transactions over the course of the year due to the shortfall in new properties being built.
“While the UK housing market has seen some substantial volatility in demand over the last 18 months, the most consistent feature has been a distinct shortage of new instructions. With respondents reporting another fall in appraisals during August, and looking at general market conditions, we have no reason to believe this will change in the near term,” he said.
“Therefore, despite the fact that demand has been picking up in recent months, we have lowered our forecast for transactions for 2015 from 1.25 million to 1.2 million. Alongside this, we have revised our expectations for price gains this year up to 6%.”
