House prices at strongest since October 2002

According to Northern Echo business, the housing market is experiencing its highest demand for three years, with prices now standing at an 11-year high, a new report has said.

A Royal Institution of Chartered Surveyors’ (RICS) report said house prices hit their strongest level since June 2002 in October, as demand outpaced the amount of properties on the market.


The survey showed the North-East was still lagging behind the South in housing prices, but did reveal the number of buyers inquiring about homes was picking up.


The report comes just weeks after a Nationwide survey said the North-East’s housing market was showing signs of life, after prices in the North increased by 0.9 per cent in the last quarter and 0.2 per cent in the last 12 months.


Bosses say the Bank of England’s Funding for Lending scheme, which has contributed to low level mortgage rates, and the Government’s Help to Buy scheme, have helped to increase demand.


The report also said UK prices are expected to increase by three per cent nationally in the next 12 months, and by 4.5 per cent every year for the next five years.


Simon Rubinsohn, RIC’s chief economist, said: “It’s no secret the housing market is gathering some momentum and that buyer numbers are on the rise right across the country.


 “A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant more and more first time buyers are in a position to enter the market.


“In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and, in order for the market to function correctly, this imbalance urgently needs to be addressed.


“Housebuilding starts have picked up recently but we are still well behind in terms of the amount of properties needed.


“If we are to create a more sustainable market, it is critical that many more good quality homes are built in areas where people want to live.”


The average number of homes sold per chartered surveyor in the three months to October hit 20.3, still historically low, but the highest number since February 2008


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