RICS reveals London housing market growth

Amanda Jarvis

March 16, 2006

Growth is concentrated in London where surveyor expectations of price rises are hitting a two year high. There are also reports of sealed bids resurfacing. One Kensington agency reports receiving 33 sealed bids on a house, all in excess of the asking price, where they received only two offers on an identical property just a year ago.

49 percent more London chartered surveyor estate agents reported a rise than a fall in house prices over February, the largest rise in three and a half years.

Family homes are the properties in highest demand.

17 percent more chartered surveyor estate agents across England and Wales reported a rise in prices than a fall, the firmest growth since June 2004. New purchase enquiries have also risen despite fading hopes that interest rates will fall again.

The stock of available properties on surveyors’ books fell 4 percent from the same time last year. This tightening of supply has brought a new sense of urgency to the demand side of the market with buyers keen to progress deals to avoid disappointment.

Around the UK the picture is mixed with more moderate price rises in the South East and South West accompanying muted growth in other regions, and small falls in the Midlands. Price inflation has slowed in Scotland after several months of strong rises.

RICS spokesman James Scott-Lee, said:
‘Traditionally, where London goes the rest of the market follows and agents will be hoping this is the starting gun on wider, firmer housing market growth as buyers begin to compete more aggressively for the homes they want.

‘Overall, the national picture shows a pick up in family two and three bedroom houses. This is precisely the kind of house that is being built less and less as the Government’s planning policy favours high density building, which often means two bedroom flats.’

‘With available property in short supply, sellers are retaining a strong position if their pricing is realistic.”

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