Lack of supply lifts house prices as mortgage lending increases

HOUSE prices rose in August for the first time in two years, new data from the Royal Institute of Chartered Surveyors (RICS)showed yesterday, providing further evidence that activity in the housing market is improving.<br /><br />The seasonally-adjusted net balance of surveyors reporting rising rather than falling prices over the quarter to August turned positive with a reading of 11 per cent, up from minus six per cent in July. <br /><br />And a net balance of 12 per cent of surveyors reported that new instructions had increased in August, compared to a reading of four per cent in July. <br /><br />The average stock of unsold property on surveyors&rsquo; books rose from 60 to 63, but remains around 23 per cent lower than August 2008.<br /><br />Meanwhile, the Council for Mortgage Lenders&rsquo; survey on lending for house purchase yesterday showed its first annual growth in July for the first time since early 2007.<br /><br />Homebuyers took out a total of 56,000 loans totalling &pound;7.5bn, 24 per cent higher than in June and 19 per cent up on the same period last year. The value of home loans was 27 per cent higher on the previous month and six per cent up on July 2008.