House prices to continue to rise for rest of 2013

The Royal Institution of Chartered Surveyors (Rics) predicts that house prices will continue to rise through the rest of the year.

Rics said the UK property market continues to recover with house prices rising and demand increasing in June. It expects house prices to rise by 1.5 per cent over the course of the year, after predicting that prices would be static at the start of the year.

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It urged the government to take measures to increase the supply of new homes.

The latest data is further evidence of the improved state of the property market as surveyors were at their most positive about increased sales for 14 years.

21 per cent more surveyors said that prices went up rather than down, the highest proportion since January 2010 and Rics members expect this trend to continue, with 23 per cent more expecting house prices to rise rather than fall over the next three months.

Rics said the improved market conditions has been caused by prospective buyers returning to the market, with a net balance of 38 per cent more chartered surveyors reporting a rise in new buyer enquiries.

Rics believes the increase is a clear sign of improvements in the property market because it has been sustained and risen month on month since January and is currently showing its fastest rate of growth since August 2009.

Peter Bolton King, RICS Global Residential Director said: “After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market.”

The latest report from Rics matches other recent positive data emerging from the industry and from builders.

Last week, Taylor Wimpey, one of the UK’s largest builders said that we are now seeing the first major boost to the housing market for six years.

Halifax’s latest house price index for June showed that on a quarterly basis house prices went up by 3.7 per cent, the biggest increase since August 2010.

Rics reports one final piece of positive data, that a net balance of 45 per cent more respondents predict that sales will increase, the most positive reading in the history of this series, which started in April 1999.

Peter Bolton King added: “It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the market do appear to be paying dividends.”

Mr Bolton King was referring to the Bank of England’s Funding for Lending Scheme, where the banks can borrow money at cheaper rates on condition that they pass on the borrowing to households and businesses.

Rics reports that even though there is more activity in the property market, the demand for rental property is continuing to rise and rental prices are expected to continue to increase in 2013.