House prices predicted to rise

A rise in house prices for the first time in 18 months has been predicted in a poll of chartered surveyors.

An increase in demand, combined with the possibility of further interest rate cuts, have led to predictions that the house prices could see a ‘marginal rise’ by the end of the year, the Royal Institution of Chartered Surveyors reported.

The number of chartered surveyors in England, Scotland and Wales reporting price falls for September dropped to 21%, from 25% in August.

Although the RICS described buyer interest as “modest”, it reported that new buyer enquires in September increased for the fourth month running.

Buyers also have more choice and room to negotiate on prices, because of the high level of unsold property on the market, the RICS said.

However, house prices remained varied across the regions. London’s house prices remained “static”, the RICS found, after dropping since the middle of 2004. Price falls, however, have slowed in other areas of the country, particularly in East Anglia and the North, while prices in Scotland have continued to rise.

The pace of price falls increased slightly in the South East and Wales, while prices in the North West dropped again, following two months of stability.

RICS housing spokesperson, Ian Perry, said: “While sellers asking for unrealistic prices are still struggling to find potential buyers, they are beginning to feel more confident as fears of a sharp fall in house prices have largely dissipated.

“The amount of new property coming onto the market fell in September for the first time in one-and-a-half years.

“The upturn in demand and improved outlook on interest rates has led surveyors to predict house price rises for the first time since early 2004, though these are expected to be small.

“RICS expects the recovery in activity to be sustained due to continued expansion in employment, which bodes well for a stable housing market.”

(KMcA/GB)