House prices rose at the fastest pace in over four years and enquiries rebounded as confidence returned following the August interest rate increase, according to the October UK Housing Market Survey by the Royal Institution of Chartered Surveyors (RICS).
The survey says that 48.1% more Chartered Surveyors reported a rise than a fall in October, up from 45.7% in September, and still more than double the long run average of 21%. Last month's house price ripple has spread throughout the country with price momentum evident in the East and West Midlands. RICS estate agents reported that London and the South East are still leading the charge - boosted by a booming city economy - with house prices in London accelerating at the fastest pace since June 1999.
New buyer enquiries rebounded after last month's slowdown and rose for the seventeenth consecutive month, the longest run on record. The pace of increase quickened as would-be-buyers returned to the market place and shrugged off August's interest rate rise in light of a strong economic and employment picture.
The ratio of completed sales compared to the stock of available property rose to 40.9% from 39.1%. This is the highest ratio in two years and indicates an increasingly buoyant market. Completed property sales per surveyor rose to the highest level since August 2004 while stocks of unsold property fell to the lowest level since the same date.
Confidence in sales outlook dropped back slightly, but the expected November interest rise did not dampen optimism in price outlooks which rose to the highest level since March 2004. Falling supply of property is expected to put further upward pressure on prices.
RICS spokesman, Ian Perry, said: "Even after last week's interest rate rise, surveyors are still confident that the housing market will remain buoyant. It is too early to discount a further interest rate rise early next year. An assessment needs to be made of the impact of higher interest rates on spending in the high street over the key Christmas period and the pulse of the business sector. London continues to see city bonuses inflate the housing market beyond the accessibility levels of most first time buyers, and the rest of nation is showing early signs of building up momentum as prices pick up in the laggard markets of the midlands and northern England. But the market is unlikely to feel cold winds from high finance costs until mid year at the earliest as economic conditions are favourable."
