HOUSE PRICES in England and Wales rose for the first time in more than two years, adding to a raft of data suggesting conditions are levelling off as the economy regains its footing, a survey showed yesterday.

The Royal Institution of Chartered Surveyors (RICS) said its seasonally adjusted balance of surveyors reporting a rise in prices in the last three months versus those recording a fall rose to 10.7 in August from an upwardly revised -5.7 in July.

August’s result was the first positive reading since July 2007 and the highest since May 2007.

British mortgage lenders Halifax and Nationwide have both recently reported monthly house price rises, although prices are still sharply down on the year and most analysts are wary about calling a recovery yet.

The RICS survey showed its members have become increasingly confident that prices will keep rising, with a balance of 17 per cent expecting increases in the next three months, up from 7 per cent in July.

The number of home sales rose to its highest since May 2008, at an average of 17 per surveyor in the three months to August, and a net balance of 12 per cent of surveyors said they had received more new instructions to sell a home. Market conditions also continued to tighten, with the ratio of sales versus the stock of property still on the market – a measure used by analysts to predict future price movements – up for the eighth consecutive month at 27, which was its highest since January 2008.

However, RICS cautioned that prices were being supported by a lack of properties being put up for sale, and warned the increase could wane if supply picks up and interest rates started rising.

Indeed, the balance gauging newly agreed sales fell to 34 in August from 45 in July and the balance of surveyors expecting sales to keep rising was broadly steady at 29. Moreover, enquiries from new buyers eased to a balance of 49 per cent from a recent high of 66 in June, RICS said.

“The latest survey provides further evidence that activity in the housing market continues to improve, although the pace of improvement may be slowing,” RICS said. – (Reuters)