RICS react to Nationwide house price data

House prices rose by 0.8% for July, the strongest increase recorded since January when they rose by 1.4%, figures out from Nationwide show.

The rise in July has pushed the annual rate of increase in prices to 5.9% from 5.0% in June, the strongest pace of increase since April 2005 when they rose by 6.8%.

The figures show that house price rises have accelerated after a modest pause during the Spring months, with rises back above growth in wages which were only running at 4.1% in May.

However, RICS estate agents have reported that significant house price rises are only apparent in London and the South East of England at present, with the rest of the country reporting moderate rises or even flat house prices.

Milan Khatri, RICS chief economist, says: “Evidence for an upturn in the housing market also comes from rising levels of mortgage approvals, which at 120,000 in June are well above the average of the past decade of 102,000. These figures suggest that house price rises will remain firm well into the second half of 2006.

“Moreovert sales activity and new purchase enquiries are on the rise across the country and not just limited to southern England, pointing to a broadening out of the market recovery from the sluggish market conditions experienced in 2005.”