UK house prices on the rise again

UK house prices rose again in August, pushing the Royal Institution of Chartered Surveyors (RICS) index to its highest value since November 2006. The survey of property surveyors also pointed to an improvement in Northern Ireland, with surveyors reporting price rises in August for the third consecutive month.

RICS Northern Ireland housing spokesman Tom McClelland said it had proved a positive summer for the housing market. “Whether this sunny disposition can be sustained into the autumnal months remains to be seen,” he added. “But we remain of the view that although there will inevitably be seasonal variations and bumps along the way, the market remains on course for a general improvement over the year as a whole.”

In the UK, Peter Bolton King, global residential director at RICS, said that it “wasn’t surprising” that people are looking to sell. “The buyers are out there and prices are on the up so if you’re looking to move it’s a good time to do so. What we don’t wish to see, however, is prices rise to such an extent that they become unaffordable.”

The index of new buyer enquiries increased to 66 in August from 54 in July, the highest since the series began in 1999, and the outlook for prices over the next three months climbed to 45 from 37. A positive number means more property surveyors saw an increase rather than a decline. In a sign that supply is not keeping up with rising demand, the measure of new seller instructions was at 26 last month, up from 16 in July. While supply is improving, RICS said the ratio of sales to stock, a measure of slack in the market, is “well below” its long-run average, indicating activity “has a long way to go before conditions are back to normal.”

Chancellor of the Exchequer GeorgeOsborne’s Help-to-Buy program, which began in April, has already spurred sales of newly built homes. The second phase, including guarantees meant to unlock £130 billion of mortgage lending, will be available for all homes starting in January. The BOE’s Funding for Lending Scheme has helped improve mortgage availability, RICS said.

(Additional reporting Bloomberg/PA)