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Survey finds no drop off in property prices

18 May 2004
The UK property market shows no sign of cooling off, new figures show.

With an eye on future inflation, the Bank of England's Monetary Policy Committee raised interest rates on three occasions since November to 4.25 per cent in a bid to control seemingly freewheeling consumer spending and soaring property prices.

But the Royal Institution of Chartered Surveyors (RICS) noted potential buyers had not been deterred by high prices.

In the three months to April, RICS found that 46 per cent of estate agents in England and Wales reported price increases.

Price rises would be particular robust in northern England and Wales, the survey reported, with sales likely to improve in the South over the next few months.

Surveyors were confident prices would further improve going into the short term, with a third more surveyors expecting gains.

This figure is up from a six-month low of 24 per cent last November following the Bank of England's first interest rate rise.

Although prices rose at their fastest since October 2002, RICS said a drop off was expected in the second half of the year, as higher interest rates started to take effect.

Jeremy Leaf, RICS housing spokesman, said: "The expected springtime flood of properties onto the market has just not materialised.

"Many people are realising that the current number of houses for sale is as good as it gets for now, and are looking to buy quickly rather than risk paying more for a similar property over the coming months."