House price growth remains strong, with prices rising for the 16th consecutive month in February, according to the latest RICS Housing Market Survey. Market conditions are at their tightest since June 2004, thanks to a severe lack of new properties coming to the market. Meanwhile prices in London and the South of England are booming and in Scotland prices are rising at their fastest pace for several months, the figures show.
The strength of financial services in London is continuing to support a flourishing property market in the South East. But across the rest of the country the picture is slightly weaker, according to RICS. Lower buyer confidence levels and reduced numbers of new buyer enquiries caused by rising interest rates are putting a dampener on the market.
But until there is a rise in new sales instructions, prices will keep on rising, says RICS. ‘Bullish market conditions still prevail in the South East, Scotland and Northern Ireland,’ said a spokesperson. However with another interest rate rise impending and Home Information Packs due to be introduced in June, the market conditions could soften further over the coming months.
‘Market conditions remain tight but greater awareness of HIPs, in the run-up to their introduction, might push more property onto the market in the coming months increasing choice for the short term,’ said the RICS spokesperson.
“With a further interest rate rise still looking more likely than not, our forecast of a housing market slowdown this year remains on track,” added Ed Stansfield from Capital Economics.