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Spring weather encourages house price rise says RICS

4:15pm GMT, Tuesday, 11 May 2010

Spring weather encourages rise in house prices. Spring weather has encouraged a rise in house prices.

In its recent UK housing market survey, the Royal Institution of Chartered Surveyors (RICS) has found that there has been a rise in house prices in April compared to March.

The warmer spring weather has also encouraged enquiries from new buyers – rising from 1% to 8%; and 11% of surveyors also saw a rise in new instructions.

The figures – collected from 245 members who work as estate agents – show that 17% more surveyors reported a rise than a fall in house prices in April, up from 9% in March.

London led the upsurge with 55% more surveyors reporting a rise, up from 32% the previous month. Elsewhere, surveyors are still reporting house price rises in every region except for Wales, Yorkshire and Humberside.

RICS spokesman Jeremy Leaf said: “For much of 2010 the housing market has been under the shadow of the general election, with the gap between supply and demand growing wider as potential house buyers opted to stand on the sidelines awaiting the outcome of the poll.

“However, the start of spring has seen renewed optimism, with the good weather improving sentiment and surveyors expecting an increase in both sales and house prices. The housing market often sees an increase in new instructions in the early part of the year with sales boosted in the spring, and this year has been no exception.”

Activity is expected to rise over the coming months with many surveyors anticipating a post-election bounce. The sales expectations net balance rose from 6% to 25%, while the price expectations net balance rose from -2% to 7%.

The average number of completed sales rose for the first time in three months to 17.4% per surveyor, while the average stock of property on surveyors’ books decreased by 6% on the month to 61 properties per surveyor.  This had the effect of raising the sales to stock ratio – a key indicator of future house price inflation – from 25% in March to 28% in April. This is the first upward movement of this indicator in 2010.  

Although prices have risen noticeably in the past year, the upward trend has been easing off in recent months, according to lenders such as the Halifax and Nationwide. The return in consumer confidence indicated by the RICS survey is also contradicted by UK retail sales during April, which fell 2.3% on a like-for-like basis with the same month last year, according to the British Retail Consortium.

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