More surveyors report price rises

The UK housing market has shown signs of revival

More surveyors said UK house prices were rising in the three months to September than those reporting falling property values.

The proportion turned positive for the first time for two years, the Royal Institution of Chartered Surveyors' (Rics) survey found.

The change was driven by price rises in the South East of England and shortages of homes for sale.

The government's own figures showed a 1.4% rise in prices from June to July.

"Although it is clear that house prices are now rising, it continues to be a lack of supply that is underpinning the recovery in most parts of the country," said Rics spokesman Jeremy Leaf.

He said that more sellers were considering putting their properties on the market but this could "present a challenge" to rising house prices when interest rates increased.

'More sales'

The National Association of Estate Agents (NAEA) said that first-time buyers had returned to the market, followed by home movers.

Buyers are chasing homes that they thought they would have time to consider at a gentler pace Surveyor Robert Green

Families wishing to upgrade or young couples needing a bigger house to raise a family were active in the market again, according to NAEA president Gary Smith.

This was backed up by the Rics survey which showed that more surveyors were reporting enquiries from new buyers.

The actual number of sales was also up - with surveyors selling an average of 17 each in the last three months. This was the most since May 2008 but still a third down on the position at the beginning of 2008.

Sales were highest per surveyor in the East Midlands and West Midlands, with the lowest number of sales per surveyor reported in London.

'False dawn'

Surveyors revealed a general view that demand for homes was not matched by the number coming onto the market, and this lack of supply was the reason prices were rising.

ANNUAL HOUSE PRICE FALLS Scotland: 4.4% (average home cost £159,725) Wales: 6.4% (average home cost £150,753) England: 8.4% (average home cost £202,154) Northern Ireland: 22.2% (average home cost £174,834) Source: DCLG figures for July

Robert Green, of John D Wood and Co in Oxford, said: "The low volume of stock is keeping the market buoyant and buyers are chasing homes that they thought they would have time to consider at a gentler pace.

Separate figures released by the Department of Communities and Local Government (DCLG) showed that UK house prices were 1.4% higher in July than in June, but still 8.3% lower than in July 2008.

The quarter-on-quarter change, a less volatile measure than monthly changes, showed that prices rose by 2.1% - a shift from falling values of 2.8% seen in the quarter to the end of April. The average UK home cost £196,338 by July.

Year-on-year prices fell by 4.4% in Scotland in July, they were down 6.4% in Wales, fell 8.4% in England, and were down 22.2% in Northern Ireland.

In the English regions, the annual fall in prices ranged from a 6.8% fall in Yorkshire and the Humber to a 9.6% drop in the East of England.

Earlier in the week, the economic forecasting group The Ernst & Young Item Club said that the recent rise in UK house prices was a "false dawn".

Repossessions drop

Separately, the Financial Services Authority (FSA) published figures confirming that there was a fall in repossessions in the second quarter of the year.

The number of loans subject to a repossession dropped by 9% from the first three months of the year to 13,610.

In August, the Council of Mortgage Lenders reported a 10% fall over the same period.

The FSA said the number of new mortgage accounts moving into arrears, defined as being behind by at least 1.5% or more of the mortgage loan, dropped for the second quarter in a row, down by 14% from the first quarter to 51,000 new arrears cases.

However this did not stop the total stock of arrears cases continuing to grow, albeit more slowly.

This total now stands at 403,000, 1% higher than in the first three months of the year, though still 30% higher than a year ago.

The FSA commented that low interest rates were slowing down the slide of more borrowers into arrears, but people already behind with their payments were still struggling to pay off their backlog of mortgage repayments.

"Publicity around the government schemes and greater lender forbearance is encouraging borrowers to contact their lender earlier," said the Building Societies Association.

"The BSA research shows that where this happens the overwhelming majority of borrowers are able to keep their homes and successfully overcome their arrears problems."

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