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16/05/07 - UK House
Prices Continue to Rise |
House price inflation
picked up for a second straight month in April, according to the Royal
Institution of Chartered Surveyors…
That was despite a fall in demand from home buyers and an increase in
property on the market, says the RICS' report.
Nearly 30% more of its members reported a rise in prices than a fall during
the month, up from 26.9% in March.
House prices have now risen for 18 consecutive months, with hikes driven
primarily by renewed momentum in London, the South East and East Anglia.
The pace of increase remains above the long run average of 21.6%, in an
indication that the property market remains in robust health.
New instructions to sell property rose in April in advance of the
introduction of Home Information Packs, the RICS said.
"Last week's interest rate hike may not be the last as the housing market
has not slowed as quickly as expected given the initial round of rate
rises," said the RICS's Ian Perry.
"With prices buoyant and conditions still tight another rate rise later in
the summer looks likely."
Demand could be ‘weakening’
The survey did, however, suggest that demand could be weakening, with new
buyer enquiries declining for the fifth consecutive month and at a faster
pace.
Surveyors reported an increase in the number of sellers listing their
properties early in order to avoid the upfront cost of the packs.
"The fear of paying the upfront buying costs of HIPs has pushed more
property onto the market.
"This will continue throughout May but conditions should tighten if HIPs
goes ahead on June 1 as sellers withdraw from the market."
Inflation slows to 2.8% in April
The rise in house prices has coincided with the UK's rate of inflation
slowing after energy bills were cut, official figures have shown.
Consumer price inflation fell to 2.8% last month, against 3.1% in March, the
Office for National Statistics said.
The Retail Prices Index, an inflation measure often used in pay bargaining,
fell to 4.5% in April from 4.8%.
Last week, the Bank of England raised UK interest rates by a quarter of a
percentage point to 5.5% - the highest level in six years.
Many analysts are predicting that rates will climb by another quarter point
despite the slowdown in price growth.
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