Rics: House prices 'absorb barrage'

12 April 2007
UK house prices appear to have 'absorbed the initial interest rate barrage' without any visible dampening effect, the Royal Institute of Chartered Surveyors (Rics) reports.

As house prices rose for the 17th consecutive month in March, the rate of growth also quickened for the first time in five months in spite of the latest base rate rise in January.

Against the backdrop of a long-term average of 21.6 per cent more chartered surveyors reporting growth in monthly prices rather than decline, in March 25.5 per cent more industry insiders reported growth.

The effects of worsening affordability are also impacting on new buyer enquiries, which fell for the fourth month in a row, Rics found.

Meanwhile, the stock of unsold property listed by surveyors fell to its lowest level since June 2004.

But although "market conditions remain tighter than ever", Rics spokesman Jeremy Leaf remains optimistic about future longer-term house price drops.

"History tells us that further rate rises could knock confidence and activity significantly later in the year," he remarked.

Although responses to interest rate rises have to date been underwhelming, a further interest rate increase is widely anticipated in May.

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