House prices register biggest increase in two years: RICS |
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Thu, 15 Jun 2006 15:05
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LONDON - House prices in the UK registered their biggest increase in two years in May despite speculations of an interest rate hike by the Bank of England, according to the latest report by the Royal Institution of Chartered Surveyors.
The report, which was released today showed that the volatile stock markets had not deterred buyers and that 20 percent more chartered surveyors, had reported a rise in value as opposed to the 15 percent reported in April. RICS added that 18 percent more members had reported a growth in new instructions to sell. But this was bypassed by buyers' enquiries, which grew by 22 percent.
"The strength of the housing market suggests consumer confidence in the UK economy. Buyers are trading up the housing ladder and have blown dust from their wallets as interest rates remain stable. Price rises for family homes continue to outpace flats for a third consecutive month," said Jeremy Leaf, a spokesman for RICS.
The group said that the price rises were the strongest in London where values grew at a faster clip since June 2002. Even in Scotland values were rising briskly, RICS said.
But the increase in house prices will be kept in check by the increasing number of sellers, RICS warned. "The cost of Home Improvement Packs and new Houses in Multiple Occupancy legislation may encourage more people to sell before June 2007, while the fear of interest rates hikes and a volatile equities market is likely to have a cooling effect later in the year," Leaf said.
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House price inflation slightly up in Q4 2005 