UK house prices continue upwards

According to the latest report from the Royal Institution of Chartered Surveyors (RICS) house prices have increased by their fastest rate for four years, led by London increases.

In its monthly survey RICS said that the number of members reporting rising prices versus falling prices had increased to 48 percent for October, an increase from the previous months 46 percent. The consensus was that the ratio was expected to decline t about 40 percent.

The increase was led by rising prices in London but has rippled out as far as the midlands.

According to RICS house prices in the South East and London are now accelerating at their fastest rate since June 1999. These are being fuelled at the top end of the market by expectations of huge city bonuses this year.

RICS also reported that new buyer enquiries had risen for rebounded after a slowdown last month and rose for the seventeenth consecutive month.

"Even after last week’s interest rate rise, surveyors are still confident that the housing market will remain buoyant," said Ian Perry, spokesman for the Royal Institution of Chartered Surveyors.
"But the market is unlikely to feel cold winds from high finance costs until mid-year at the earliest as economic conditions are favorable," he added.

RICS Also reported that the number of properties sold at auction had increased by 12 percent over the last two years.

Unlike Australia where a large proportion of houses were sold at auction outside the property itself, there is a general feeling in the UK that only repossessed or ruined properties are sold at auction.

Last year, 15,514 residential properties went under the hammer, a small but growing share of the property market. Only 70 percent of those sold at the actual auction.

The news will bring comfort to those expecting a drop after the latest rounds of increases, remembering that the increase would have been factored in during the month of October as a near certainty.

At the same time even though the CPI results were lower than expected, the Bank of England’s MPC will be keeping an eagle eye on the RPI and house price indexes.

The pendulum will now swing more progressively in favor of further rate increases.