The Royal Institution of Chartered Surveyors (RICS) has reported house prices rising at their fastest pace since 2004 in their latest housing market survey.
The report found that all regions are now experiencing price rises for the first time in over two years, although wide variations in price rises remain.
The report says that strengthening demand and less new instructions will ensure steady house prices over the next three months, and the quarter percentage point rise interest rates is not expected to knock market confidence.
A drop in instructions to sell property was attributed by the report to the government U-turn on Home Information Packs, removing the urgency for would be sellers to market their properties.
The report also found stocks of unsold property have reached the lowest levels since September 2004, down 10% on last year, while completed property sales for the past year were up 16.9% against a rise of only 11% in January.
London and the South East remain the strongest housing markets boosted by a strong financial services sector.
Healthy gains in house prices were also recorded in the North West, Scotland and the South West, but the rest of the country is only showing muted gains.
RICS spokesman, Jeremy Leaf, said: “The increase in interest rates will do little to dampen the market as a strong economic outlook and improving employment prospects will hold up the confidence of households.
“Further interest rate rises are to be expected later this year and will slow activity in early 2007 from current buoyant trading levels.
“Rising house prices are still preventing first time buyers from entering the market creating a property glass ceiling for many in London and the South East.
“The government’s u-turn on HIPS has released the pressure on prospective sellers to place their properties on the market.
“With no pressure on prices, the market will see continued growth in the coming months. The UK continues to enjoy the sunshine, but the property market never takes a holiday.”
References: EGi News 15/08/06
