House prices continued to rocket into September, according to the latest data from the Royal Institute of Chartered Surveyors (RICS). Over 45% of agents reported a rise than a fall last month, up from 34.9% in August, and a considerable increase on the 21% long run average.
Increases are again led by London and the South East, according to local surveyors, boosted by confidence in the City and in the stock market. As a result it seems gazumping is making a comeback as prices in the capital rise at the fastest pace since January 2000.
This is also creating a ripple effect which is pushing up prices in the North West and East Anglia, as well as the traditionally slower markets in Wales, Yorkshire and Humberside.
New instructions to sell property fell for the fourth month in a row, according to RICS, indicating that households see no pressure to put their house on the market before the anticipated end-of-year lull.
?Greater economic activity has created a ripple effect in house prices across the country,? said RICS spokesman Jeremy Leaf. ?With stocks of property low and buyer inquiries on the increase, sellers remain in poll position to benefit in the short term.
But economists at Capital Economics (CE) maintain that the August interest rate rise could still have a cooling effect on the market: ?We have always argued that it would be two to three months before the impact of the rate rise could be properly assessed,? says Kelvin Davidson of CE.
?If September?s drop in new buyer enquiries is a sign that confidence has been knocked then a further rate rise in November can be expected to dampen confidence further. Accordingly, the chances of a modest cooling in market activity and price growth into 2007 are rising.?
Nationwide?s figures, released today (Thursday), paint a similar picture to that of RICS. Figures for September put the average house price now at £168,460 up from £157,627 this time last year, equivalent to a price increase of £30 per day in the past twelve months.
Nationwide also acknowledged the rapid price growth in the capital, stating that many wealthy buyers from overseas had bought property there recently, pushing up all prices as a result.
The report also said that house prices in Northern Ireland have been record-breaking: ?House prices in Northern Ireland increased by an incredible 33.4% in the last twelve months,? said Fionnuala Earley, Group Economist at Nationwide.
?This is the fastest ever rate of growth in Northern Ireland and almost five times faster than the average for the UK,? she added.
Scotland also saw big price rises last month, as the south of England speeded ahead of the north, Nationwide found.