May 15 2007
House prices gained further momentum in April despite increased supply triggered by the forthcoming introduction of HIPS (Home Information Packs), says RICS’ UK housing market survey published today (14 May 2007).
House prices rose for the eighteenth consecutive month in April driven primarily by renewed momentum in London, the South East and East Anglia. 28.9 percent more Chartered Surveyors reported a rise than a fall in house prices, up from 26.9 percent in March. The pace of increase remains above the long run average of 21.6 percent indicating that the housing market is still in rude health.
New instructions to sell property rose for the second consecutive month after the longest decline in seven years. The pick up appears to be closely related to the planned introduction of HIPS rather than any decline in the state of household finances. Surveyors report that increasing numbers of sellers are listing their properties early in order to avoid the upfront cost of assembling the pack. Consequently, the stock of unsold property on surveyors’ books increased for the first time since last November. As sales per surveyor slowed, the ratio of completed sales to the stock of available property on the market fell for the first time since last May.
New buyer enquiries declined for the fifth consecutive month and at a faster pace, indicating that recent interest rate hikes are weighing heavily on buyer affordability. 11 percent more Chartered Surveyors reported a fall than a rise in new buyer enquiries compared to 8 percent in March.
Yet again the strongest house price growth took place in Northern Ireland and Scotland with London again leading the way in England. Price rises also increased more firmly in East Anglia and the North West, but prices fell mildly in the East and West Midlands.
RICS spokesman, Ian Perry, said:
“Last week’s interest rate hike may not be the last as the housing market has not slowed as quickly as expected given the initial round of rate rises. With prices buoyant and conditions still tight another rate rise later in the summer looks likely.
“The fear of paying the upfront buying costs of HIPS has pushed more property onto the market. This will continue throughout May but conditions should tighten if HIPS goes ahead on June 1st as sellers withdraw from the market.”