Housing prices rising in Britain

In its monthly snapshot of the market, the Royal Institution of Chartered Surveyors recorded evidence of gazumping and sales of £5m homes, and predicted that the pick-up in selling prices would continue over the coming months.
Rics said London had seen the most marked price rises since the depressed conditions of a year ago, when the financial crisis had reduced activity to a trickle. The balance of surveyors reporting rises rather than falls in house prices stood at +34 points in October, it said, up from +20 points in September and the strongest finding since December 2006. In London, the balance stood at +95 points – the highest figure since December 1996.

Although sales of homes remain around half the levels seen before the crash, a separate report also out from the British Retail Consortium found that shops selling household goods and furniture were benefiting from a rising property market. The BRC boosted hopes that the UK would return to growth in the three months to December, saying the high street had had its best October for seven years.
RICS spokesman Jeremy Leaf said, “Although the supply of property is beginning to pick up, it is still insufficient to keep pace with the increase in demand, which points to further price gains in the near term. “Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders.”
Benson Beard, surveyor at west London agents Bective Leslie Marsh, said, “The continued lack of property on the market has created an overheated market which will inevitably cool as purchasers realise prices are fast reaching 2007 levels.”
Robert Green, of John D Wood in Chelsea, said, “The recovery started with the lower value properties in the area, but has worked its way up to the £5m level.”
A net balance of +15 percentage points of surveyors reported new instructions had increased in October, up from +5 points in September. Rics said it was the first time since the onset of the credit crunch that instructions had risen in every region of Britain.

The BRC said retail sales were 5.9 per cent higher than in October 2008, a month badly affected by the financial crisis, and were up by 3.8 per cent on a like-for-like basis – stripping out the impact of any increase in floorspace over the past year. Stephen Robertson, BRC director general, said, “These are encouraging results. They are, however, compared to dreadful figures last year when the final three months were all negative.

“With less than 50 days to go before Christmas, retailers will be hoping improved consumer confidence will be sustained through the festive period and beyond. Shops have already started to battle it out for customers with a string of promotions and discounts. But 2010 has many uncertainties, including the likelihood of rising unemployment and tax increases.”
Larry Elliott
The Guardian