Housing boom in the horizon as market welcomes potential new buyers

As the supply for homes being sold goes down, statistics suggest an increase of potential buyers. This could lead to boom in house prices.

Statistics from the Royal Institution of Chartered Surveyors (Rics) this week expects to see a surge in potential new home buyers as reported by This Is Money. As supply of houses being sold is dwindling, another boom in house prices could well be on the way.

This was the same information reported by Rics in May this year, according to BBC, saying that the number of people putting up their houses for sale has fallen "deeper into negative territory. This increased the prices of houses during those times. According to its May survey, homes being put up for sale has dropped at a faster rate than any other timeline since May 2009.

Capital Economics' housing market expert Hansen Lu said last week that a strong economy and healthy mortgage market has lead to a surge of prospected house buyers. The shortage of homes on the market leads to higher prices.

"With few signs that market conditions will loosen soon, price growth should accelerate towards the end of the year," Lu said.

On another note, Telegraph UK reported the Bank of England will meet this week to possibly increase interest rates. But economists predict the rate hikes will not happen until next year.

The US Federal Reserve will also meet on September 16 to 17 to decide whether to increase interest rates soon. Some believe it won't happen until December, but there are others who expect it to happen sooner, especially with the progress on employment in the US.

Bank governor Mark Carney said that the chaos in stock market in August will not change the Bank's plan to increase interest rates.

IHS Global's chief UK economist Howard Archer, said "We currently believe that the first Bank of England interest rate hike from 0.50 percent to 0.75 percent is now more likely to occur in the second quarter of 2016 than the first."