UK housing market gathers pace in March - RICS

Thursday 10 April 2014 10.50
Sales reach six year high in UK housing market
Sales reach six year high in UK housing market

British house prices unexpectedly picked up speed in March and sales reached a six year high, a survey showed today.

The results of the survey suggest the market is still firmly on the rise, after recent releases indicated a slight loss in momentum.

The Royal Institution of Chartered Surveyors' (RICS) seasonally adjusted house price balance rose last month to +57 from an upwardly revised +47 in February.

The rise took the balance near to November's +58, which was the highest since June 2002. The March reading beat all forecasts in a Reuters poll of economists, who on average predicted a balance of +44.

House prices rose in every area of Britain in March. The greatest increase in house prices was experienced in London and the South East.

This was accompanied by rising activity, with RICS's members saying they were at their busiest since February 2008.

The survey contrasted with one by mortgage lender Nationwide last week, which showed house price rises slowed in March for a third month in a row, and other recent data.

The UK housing market, buoyed by record low interest rates and government-sponsored schemes, has been a main driver of the country's consumer-led and surprisingly fast economic recovery.

As demand outstrips supply, contributors to the RICS' survey expected prices nationally to rise by 5.9% a year over the next five years, nearly double the 3.1% forecast this time last year.

Bank of England officials have played down suggestions that the housing market is overheating but have said they are vigilant about momentum in the market. The bank refocused its Funding for Lending Scheme away from mortgage lending and dedicated it exclusively to business lending at the start of this year.

But finance minister George Osborne said last month that the government will extend its Help to Buy scheme of providing equity loans to buyers of newly built homes to the end of the decade, as the government tries to tackle shortage in supply.