House prices rise after six-month dip

16 September 2003
House prices have risen for the first time since January, according to a survey of surveyors released today.

The Royal Institute of Chartered Surveyors (RICS) revealed that house prices rose slightly in August after showing signs of a recovery in the previous months.

RICS said that the housing market was buoyed by a strengthening market in the north and less weakness in the southern regions. The upturn in prices reflects a steady recovery in buyer interest since the end of the war in Iraq.

The pace of house prices in the north increased in August with the north west seeing the largest increases. Markets that were in decline since January, such as the South West and the West Midlands, saw prices rise in the month.

RICS argued that the low interest rates and the stable economic prospects for jobs have supported renewed demand for residential properties. The number of new buyers did not fall as much as usual over August, which is generally a bad month for buyer enquiries.

The number of completed sales showed a modest upturn in the three months to August and the number of unsold properties on estate agents books fell. Meanwhile, the slight fall in new seller instructions during August suggests that vendors are in no hurry to sell as the market has proved to be resilient despite fears of a crash earlier in the year.

The improvement in housing market was reflected in a new Government survey of house prices released yesterday. Figures from the Office of the Deputy Prime Minister showed a rise in annual house price inflation from 13.4 per cent in June to 14.6 per cent in July 2003.

Today's survey suggests that improvements are likely to continue over the coming months.

The survey pointed out that 46 per cent more surveyors expect a rise in property sales than expect a fall over the next three months, compared to 33 per cent in July and 5 per cent in April.