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UK house price expectations hit 14-year high in Dec-RICS
January 16, 2014 / 12:05 AM / in 4 years

UK house price expectations hit 14-year high in Dec-RICS

LONDON, Jan 16 (Reuters) - Expectations of future rises in British house prices strengthened again last month, driven by a shortage of new homes on the market, a survey showed on Thursday, although its headline price measure slipped.

The Royal Institution of Chartered Surveyors (RICS) said a net balance of 61 percent of surveyors forecast prices would rise over the next three months, up from 59 percent in November and the strongest consensus since September 1999.

The survey showed house prices rose in every area of Britain last month.

However, its main house price balance measure eased to +56 in December from November’s +58.

That undershot a Reuters poll consensus of +60 but still concluded the first four-month stretch of above +50 readings since 2002.

Britain’s housing market has been bolstered by falling unemployment, low interest rates and government programmes to make mortgages cheaper and easier to obtain.

But RICS again warned the overall strength of its data also reflects too few homes coming onto the market to meet demand.

Its sales-to-stock ratio for December, a measure of tightness in the market, hit its highest since September 2007 - around the start of a credit crunch that spawned the global financial crisis. It rose to 35.2 from 34.6 percent in November, which was revised up marginally.

“On the face of it, (the survey) seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at price rises becoming unsustainable in some areas,” said Peter Bolton King, global residential director at RICS.

Bank of England Governor Mark Carney on Wednesday forecast British house prices are likely to continue to rise robustly until the middle of next year, as part of a broader upturn in housing market activity.

London and the south east of England experienced the biggest house price gains in December, said RICS.

At a national level, house prices are still 5 percent below that peak but critics of the government’s policies say its Help to Buy scheme is more likely to pump up house prices than spur the building of more homes.

The slight fall in RICS’ headline house price balance matched a survey from mortgage lender Halifax last week, which showed house prices dropped unexpectedly by 0.6 percent in December.

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