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Tuesday 01st of June 2010
October 13, 2009    

Shortage of homes pushing up prices

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by Kay Murchie
Shortage of homes pushing up prices

The Royal Institution of Chartered Surveyors (Rics) has discovered that a lack of homes up for sale has resulted in the strongest rise in house prices since the start of the credit crunch.

According to Rics, its headline house price balance has grown to its highest level since the autumn 2007. It said that almost one quarter (22%) more surveyors thought prices gained rather than declined during September - this represents the highest proportion since May 2007.

Commenting on its figures, Rics spokesman Ian Perry, said: “A lack of supply is still underpinning the rise in house prices with new instructions to estate agents only edging up very gradually.

“Meanwhile, despite the problems first-time buyers are continuing to encounter in securing finance, the level of enquiries from potential purchasers is increasing.

“This imbalance between demand and supply suggests that house prices will move higher in the near term,” Mr Perry added.

The situation is quite different though in certain regions as the improvement was fuelled by London where 79% more surveyors reported price rises than falls. Furthermore, the South-East was extremely buoyant where more than half (52%) of surveyors reported increases rather than declines.

However, in Wales, Yorkshire and Humberside, more surveyors reported price falls than rises.

In other news, yesterday the Council of Mortgage Lenders (CML) revealed a slight fall in the number of home loans for house purchase in August.

According to the CML, there were 53,000 new mortgages granted in August compared to 56,000 in July.

While the figure represents a 5% fall on the month, the figure represents a 30% rise when compared with August last year.

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