House prices are still powering up despite the rate rises
The housing market is continuing to gain momentum, despite three interest rate rises since August last year, according to the Royal Institution of Chartered Surveyors (RICS).
Its survey of members who work as estate agents shows that house prices in the UK rose for the 17th month in a row in March.
Despite enquiries from new buyers falling again, they did so at a slower pace than before, which RICS interprets as a sign that the housing market is still in “rude health”, despite the interest rate rises.
“The housing market has absorbed the initial interest rate barrage, but history tells us that further rate rises could knock confidence and activity significantly later in the year, said RICS spokesperson Jeremy Leaf.
“However, house prices are unlikely to fall in the short term while the economic outlook remains robust.”
The Bank of England has raised interest rates three times in the past nine months and many observers have been surprised that house price inflation has remained so stubbornly high.
“I predicted after the last rate rise in January that house prices would take an almighty knock,” said mortgage broker John Mitchell. “However, I have to admit that I was wrong.”
According to Halifax, the annual rate of house price inflation rose to 11% in March and the number of new mortgages being approved for house purchase has remained stable in recent months.