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House prices to keep on rising, say Rics members

 

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 Surveyors are expecting house prices to keep rising as the UK housing market starts to record some momentum following a sluggish few years.

Members of the Royal Institution of Chartered Surveyors (RICS) expect prices to go up by 1.5% over the next 12 months, its latest survey found.

This comes after a prediction of static prices at the start of the year.

Over the next five years, they predict a 4% a year average increase in property values.

At the beginning of 2013, they said there would be a 2.5% rise.

‘Long wait’

The RICS survey follows data from lenders and house builders suggesting that activity and house prices have risen in the last few months.

Last week, the Halifax said that house prices were rising at their fastest annual rate for nearly three years. The lender said prices in the three months to the end of June were 3.7% higher than in the same quarter last year.

This rise in prices had mainly been fuelled by increasing numbers of prospective buyers returning to the market, RICS said.

“After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market,” said Peter Bolton King, global residential director for RICS.

“It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the market do appear to be paying dividends.”

These schemes include Funding for Lending, under which banks and building societies are able to borrow money cheaply from the Bank of England, as long as they lend it out to individuals and businesses.

Although prices are rising on average, according to these surveys, the increase has been driven by London and the South East of England. Other areas have seen significant falls in property values in recent years, leaving some ground to make up.

Housing market commentator Henry Pryor said the sentiment of the RICS survey should be treated with caution.

“Estate agents are optimists from birth and their glass is always half-full,” he said.

“Government support for the housing market is clearly providing firm foundations for prices to build upon in many areas, but for the time being, schemes like Help to Buy are concentrated on new-build properties. We do not yet have a feel for how the second-hand market will fare.”