House prices rose for the eleventh consecutive month at the fastest pace in four years, according to RICS’ UK housing market survey.
The report revealed that 45.1 per cent more chartered surveyors reported a rise than a fall in September, up from 34.9 per cent in August.
RICS estate agents reported that price are rising because would-be buyers are returning to the market and also due to the limited availability of property.
Price increases were dominant in London and the South East, boosted by a booming City economy, with rising investor confidence pushing the stock market to its highest level since May.
Estate agents report that ‘gazumping’ is taking place amid prices in the capital rising at the fastest pace since January 2000.
Outside the capital, a ripple effect is taking place with house prices in the North West and East Anglia picking up sharply, while Wales, Yorkshire and Humberside also recorded price rises.
RICS spokesman Jeremy Leaf says: “Greater economic activity has created a ripple effect in house prices across the country. With stocks of property low and buyer enquiries on the increase, sellers remain in poll position to benefit in the short term.
“Continuing house price rises will make it difficult for the Bank of England to leave the base interest rate level at 4.75 percent, unless the economy shows unexpected weakness. With affordability conditions for first-time buyers worsening, as price rises outstrip wages, higher interest rates will not help. However, a strong economy means that the housing market should see a soft landing in 2007.”