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Homes shortage fuels house price increases

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A lack of homes to buy is underpinning the rise in UK house prices, surveyors say.

The number reporting rises in house prices rather than falls rose to its highest level in September since the onset of the credit crunch.

However, the picture is different in certain parts of the country, a poll for the Royal Institution of Chartered Surveyors (Rics) found, but with prices in the south of England – and Kent in particular – driving the revival.

New buyer enquiries rose in September compared with August, but the level of new instructions from sellers slipped back in the same period.

RICS South East director Peter Miller, said: “A lack of supply is still underpinning the rise in house prices with new instructions to estate agents only edging up very gradually. Meanwhile despite the problems first-time buyers are continuing to encounter in securing finance, the level of enquiries from potential purchasers is increasing.

“This imbalance between demand and supply suggests that house prices will move higher in the near term.”

Martin Allen of Elgars estate agent, Wingham, near Canterbury, added, “The number of enquiries has increased rapidly but potential buyers are faced with a decreasing amount of available properties to choose from. Anything of any quality is now likely to result in competitive bidding.”

Meanwhile, mortgage lending has shown a late summer lift compared with earlier in the year, according to the Council of Mortgage Lenders.

The group said that gross mortgage lending in the third quarter of the year reached £38.9bn, an 18 per cent rise on the previous three months.

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