House prices show strongest rise in two years
House prices have soared by the highest levels in two years, buoyed by consumer confidence, The Royal Institution of Chartered Surveyors (RICS) has revealed.
The RICS UK housing market survey showed that house prices rose over the last year, with 22% more surveyors reporting a rise than a fall, compared to 15% in April.
The recent turbulence in the stock market and speculation over interest rate hikes didn’t manage to dampen demand, and buyers’ enquiries continued to rise for a record breaking 12th straight month.
Additionally, 18 percent more surveyors reported growth in new instructions to sell as vendors pushed more property onto the market due to rising unemployment, a reaction to new HMO (Housing in multiple occupation) legislation and the possible implementation of HIPS (Home Information Packs).
RICS spokesman, Jeremy Leaf, said: “The strength of the housing market suggests consumer confidence in the UK economy. Buyers are trading up the housing ladder and have blown dust from their wallets as interest rates remain stable. Price rises for family homes continue to outpace flats for a third consecutive month.
“However, the upturn in the number of sellers will keep a lid on house price rises going into the second half of 2006. The cost of HIPS and new HMO legislation may encourage more people to sell before June 2007, while the fear of interest rates hikes and a volatile equities market is likely to have a cooling effect later in the year.”