RICS: Most widespread house price growth in 4 years

Surveyors reported the largest number of house price rises in four years last month, according to a report published today.

The survey, by the Royal Institution of Chartered Surveyors (RICS), finds house price rises are twice as widespread as the long run average of 21 per cent, with 45.1 per cent more chartered surveyors reporting a rise than a fall in September, up from 34.9 per cent in August.

RICS estate agents report price rises are being driven by a lack of housing stock and would-be buyers returning to the market.

"Greater economic activity has created a ripple effect in house prices across the country. With stocks of property low and buyer enquiries on the increase, sellers remain in poll position to benefit in the short term," said Jeremy Leaf of RICS.

He added: "Continuing house price rises will make it difficult for the Bank of England to leave the base interest rate level at 4.75 per cent, unless the economy shows unexpected weakness.

"With affordability conditions for first-time buyers worsening, as price rises outstrip wages, higher interest rates will not help. However, a strong economy means that the housing market should see a soft landing in 2007."

The highest number of price rises were reported in London and the south-east, thought to be due to a strong City economy and investor confidence boosted by the stock market reaching its highest level since May.

However, price rises have meant more bad news for buyers in London.

Estate agents have reported incidents of ‘gazumping’ (when a seller accepts a second higher offer after a deal has already been agreed) in London as prices rises in the capital are more widespread than at any time since January 2000.

The number of rises in the south-east were followed by sharp increases in the north-west and East Anglia and moderate increases in Wales, Yorkshire and the Humberside.

Buyer enquiries were also up for the sixteenth month running, the longest on record. XXX