House prices show strongest rise in two years
The demand for housing has increased on the back of a healthy economic environment and consumer confidence, pushing house prices up. 20 per cent more chartered surveyors reported a rise in prices than a fall compared to 15 per cent in April. Scotland and London have shown the sharpest gains, while prices elsewhere showed moderate increases or remained flat.
RICS spokesman, Jeremy Leaf, said: “The strength of the housing market suggests consumer confidence in the UK economy. Buyers are trading up the housing ladder and have blown dust from their wallets as interest rates remain stable.”
But he added: “The upturn in sellers will keep a lid on house price rises going into the second half of 2006. The cost of Home Information Packs (HIPS) and new houses in multiple occupation (HMO) legislation may encourage more people to sell before June 2007, while the fear of rate hikes and a volatile equities market is likely to have a cooling effect later in the year.”
Kevin Paterson, managing director of Park Row Mortgages, said: “House prices have been suppressed for a while and with the cyclical nature of the market they were going to rise. However, I think we should read a fair degree of caution into the figures as they will be tempered by the rise in repossessions and bankruptcies.