Rics house price forecast allows for annual rise

| August 6, 2009 | 0 Comments
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The Royal Institution of Chartered Surveyors (Rics) has followed Halifax and Nationwide in reporting a positive outlook for the UK’s beleaguered housing market.

Following a “considerable shift” in sentiment, the Rics has abandoned its forecast of price falls of between 10% and 15% for 2009 and is predicting that prices could show a rise over the year.

However, the body warns that 2010 may present a different picture, with prices falling back again as mortgage finance remains tight and transactions remain at historically low levels.

Rics senior economist Brigid O’Leary says: “There has been a clear change in the housing market over the past few months and, as a result, it is unlikely that we will now see the kind of house price falls widely predicted at the start of the year.”

She adds: “Instead, the return of buyer demand and the limited availability of housing on the market could be enough to support prices, so it wouldn’t be surprising to actually see prices increase further from here in the short term.”

Last week, Nationwide reported that the average value of a UK home rose by 1.3% in July compared with June, putting the three-month-on-three-month rate of change up from 1.0% in June to 2.6% in July, its highest level since February 2007.

The annual rate of fall stood at 6.2%, easing back from 9.3% in June, according to Nationwide.

Halifax has since reported a 1.1% rise for July with the lender’s three-month-on-three-month measure showing prices up 0.8%, the first quarterly increase since October 2007.

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