Commenting, Simon Rubinsohn, RICS chief economist said: "According to the Nationwide Building Society, house prices rose in July for the third consecutive month. They now stand almost 4.4% above the low point touched in February. In the three months to July, prices on the Nationwide index increased by 2.6% compared with the previous three month period. This is actually the fastest three month on three month gain since February 2007 and is testimony to the strength of the turnaround in sentiment in the market.
"Bank of England data on mortgage lending released (for the month of June) suggested that the availability of secured finance was only rising in a very modest way and thus not affording much help for the property market. Net lending increased by just over £300m last month which effectively means that lenders are pretty much just lending out their repayments. By contrast in 2008 (when the market had already past its peak), net lending was averaging more than £3bn per month. Moreover, a recent RICS survey suggested that around 10% of housing transactions are breaking down because of problems with obtaining finance.
"Reflecting this, RICS believes that the recent support for prices is to a large extent a sign of a lack of supply of properties. Whether they may be described as reluctant landlords or investors, many homeowners wanting to move are hanging on to their existing homes in the knowledge that servicing costs are low and can be covered by rental income even in an environment in which yields are slipping. This could remain an important crutch for the market in the near term."
