High demand keeps house prices rising

BRITONS’ unflagging demand for property is continuing to boost house prices, albeit at a slower pace than before, the latest monthly survey from the Royal Institute for Chartered Surveyors (RICS) will say today.

The balance of estate agents reporting rising rather than falling prices fell back to 30 per cent in the three months to December 2009 from the three-year high of 35 per cent reached the previous month.

But it is still well above the net 14 per cent recorded in July and contradicts expectations for a seasonal lull in the market.

However, while new buyer enquiries increased for the fourteenth consecutive month, they did so at the slowest pace in almost a year. Other indicators of property demand such as the newly agreed sales balance also lost some momentum but remained in positive territory, despite continually rising prices.

RICS spokesman Jeremy Leaf said: “The recent loss of momentum in prices and the moderation in new buyer interest can be in part attributed to the housing market pulling down its shutters for Christmas.”

In terms of supply of houses onto the market, RICS noted that the rebound in the prices over the last five months appears to have drawn some sellers back to the market and the net balance of instructions remained at the 18-month high reached in November.

Expectations for the UK housing market also remain upbeat. The ratio of the average sales to the average stock of unsold property on the market – a gauge of market slack and a lead indicator of future price changes – fell only fractionally to 30.5 per cent.

With the exception of November, it remains the highest ratio in two years. Equally positive is that 13 per cent of surveyors are still expecting price rises rather than falls over the next three months.