TWO rate rises by the Bank of England in the last six months has done little to dampen interest in bricks and mortar in the South East.

Last month house prices have continued to pick up in the South East with strong demand, supported by improvements in the wider economic climate – unemployment in January was at its lowest since 1984, 1.43 million nationwide.

The record 20-year high in employment has also sparked the fastest increase in average earnings since August 2001, which have helped to counteract the interest rate rises and keep house prices on the up.

RICS South East Chairman David Tuffin said: “The shortage of housing in the South East is continuing to underwrite price growth. Big rises and the lacklustre performance of the stock market in recent years has also led to residential property to be perceived as the golden asset.

“Ten years from now the reality may be very different given that economic conditions change, as demonstrated in the early 90s, but for the present at least, sustained rises and limited supply spells capital gains for homeowners.”

Newly agreed sales in the South East have remained robust since the beginning of the year, but the number of new properties coming onto the market continues to remain weak.

Mr Tuffin added: “This is news not good news for first time buyers and those locked out of the housing market by the same price rises that have so benefited others. An interesting question to ask is how any present or future UK government will find the political will to build the number of houses required to halt this trend, especially with the financial interests of so many voters at stake.”