House prices rose in July at the fastest pace since 2004 as the housing market upturn broadens out, according to the latest UK housing market survey published by the Royal Institution of Chartered Surveyors (RICS).
RICS estate agents reported that all regions are now experiencing price rises for the first time in over two years. Nevertheless, wide variations in price rises remain evident. 31% more Chartered Surveyors reported a rise than fall in July, up from 28% in June.
With demand strengthening and new instructions moving into decline, surveyors remain optimistic over the outlook for house prices in the next three months with the August quarter% interest rise not expected to knock market confidence. Instructions to sell property have fallen for the second consecutive month with surveyors indicating that the government u-turn on HIPS has removed the urgency of would-be sellers to market their properties. The stocks of unsold property have reached the lowest levels since September 2004, down 10% on year ago levels.
An improving job market has instilled greater confidence across most regions during 2006 with surveys of households pointing to a good financial situation, allowing new buyer enquiries to rise in July at a faster pace than June. Completed property sales for the past year were up 16.9% against a rise of only 11% in January. London and the South East remain the strongest housing markets boosted by a strong financial services sector. Healthy gains in house prices were also recorded in the North West, Scotland and the South West, but the rest of the country is only showing muted gains.
RICS spokesman, Jeremy Leaf, said: "The increase in interest rates will do little to dampen the market as a strong economic outlook and improving employment prospects will hold up the confidence of households. Further interest rate rises are to be expected later this year and will slow activity in early 2007 from current buoyant trading levels. Rising house prices are still preventing first time buyers from entering the market creating a property glass ceiling for many in London and the South East. The government's u-turn on HIPS has released the pressure on prospective sellers to place their properties on the market. With no pressure on prices, the market will see continued growth in the coming months. The UK continues to enjoy the sunshine, but the property market never takes a holiday."
