Gov’t schemes push mortgage demand to four-year high

The UK housing market continued to show signs of recovery during June with rising house prices and increased demand from prospective buyers, data from the Royal Institution of Chartered Surveyors reveal.

Rics’ latest residential market survey reveals that 21 per cent more chartered surveyors reported prices rose rather than fell in June, making this the strongest month for house prices since January 2010.

The outlook for future prices is also strong, with a net balance of 23 per cent more respondents reporting that prices will rise rather than fall over the coming three months.

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This rise in prices has mainly been fuelled by increasing numbers of prospective buyers returning to the market, Rics’ report states. Last month, a net balance of 38 per cent more chartered surveyors reported a rise in new buyer enquiries.

Rics adds that the surge in demand is proof that government funding schemes are “making a difference”, pointing to figures showing demand from prospective buyers has now risen consistently since January and is currently showing its fastest rate of growth since August 2009.

Reflecting this slightly more positive mood, surveyors also expect home sales to rise over the coming three months, according to the report, with a net balance of 45 per cent more respondents, predicting sales will increase. This is the most positive reading in this series’ 14-year history.

Peter Bolton King, global residential director at Rics, said: “After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market.

“It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the market do appear to be paying dividends.

“Despite the increased interest in buying a property, our numbers continue to show that demand from would-be tenants remains firm and that rents are likely to continue to edge upwards over the next twelve months.

“As the cost of shelter moves higher, it is absolutely critical that the government continues to focus on its role in supporting the delivery of more new homes into the market.”