House prices rose as demand strengthened on the back of a healthy economic environment and consumer confidence, with 20 percent more Chartered Surveyors reporting a rise than a fall compared to 15 percent in April.
The recent turbulence in the stock market and speculation over interest rate hikes hasn’t dampened demand. Buyers’ enquiries have continued to rise for a record breaking twelfth month in a row, with 22 percent more Chartered Surveyors reporting a rise – the highest rise since last October - up from only 5 percent in April.
18 percent more Chartered Surveyors reported growth in new instructions to sell as vendors pushed more property onto the market due to rising unemployment, a reaction to new HMO (Housing in multiple occupation) legislation and the possible implementation of HIPS (Home Information Packs).
The stock of available property on the market has risen for the second time in three months despite a rise in sales in May. In the month of May there were 72.4 properties on average on the market compared to 71.7 in February.
Scotland and London have shown the sharpest gains while prices elsewhere show moderate increases or remain flat. House prices in Northern Ireland, which are included in the survey for the first time, have shown a sharp rise as the market benefits from the peace dividend.
RICS spokesman, Jeremy Leaf, said:
“The strength of the housing market suggests consumer confidence in the UK economy. Buyers are trading up the housing ladder and have blown dust from their wallets as interest rates remain stable. Price rises for family homes continue to outpace flats for a third consecutive month.
“However, the upturn in the number of sellers will keep a lid on house price rises going into the second half of 2006. The cost of HIPS and new HMO legislation may encourage more people to sell before June 2007, while the fear of interest rates hikes and a volatile equities market is likely to have a cooling effect later in the year.”
