House price growth doubles long term average

House price rises are running at more than double the long term annual average of 10%, and will rise until the end of the year, reveals the latest housing market survey published by the Royal Institution of Chartered Surveyors.

The boom in price rises continues to move north, with the North of England seeing the fastest rises in prices, following the East Midlands and Yorkshire last month.

In the northern region 81% more chartered surveyors reported a rise in prices than reported a fall, the highest figure since regional date was first collected. The national figure for the month was 54%, while in London it was 14%.

The average number of properties available for sale continues to remain low, at 63 per chartered survey estate agent. Although an improvement on the June figure of 56, which was the lowest average for 23 years, the on-going shortage remains a critical factor in driving up house prices.

The number of enquiries from potential purchasers fell when compared with the previous month, although this was probably due to seasonal factors. In October, 42% more contributors reported a fall in enquiries than reported a rise compared with 11% in September. However, enquiries have held up well when compared with October last year, when the difference was 52%.

Looking ahead, chartered surveyors expect price rises to continue for the next three months with 36% more contributors expecting prices to rise than fall, against 34% last month, although uncertainty over the Middle East means contributors are less positive about prospects into the spring of next year.

The expectation for prices is not maintained for sales, with only 17% more contributors expecting sales to rise rather than fall, less than the 24% last month.

Ian Perry, RICS national housing spokesman, says: “The market continues to power ahead. Despite many pundits speculating on how much longer rapid price rises can be sustained, they show no signs of slowing down before the end of the year. The on-going shortage of suitable property for sale and low interest rates remain the key factors driving up prices.

“For those already on the housing ladder, affordability does not appear to be a problem while interest rates remain at their present levels, but high price inflation means many first-time buyers are being forced to find ever bigger deposits if they want to make that all-important first step, or look to the lettings market in the short term.”