House prices still accelerating

Prices will probably rise faster in the coming months says RICS

House prices are likely to rise even faster in the coming months, says the Royal Institution of Chartered Surveyors (RICS).

Its latest survey suggests that in July, prices rose at their quickest rate for two years.

And the number of enquiries from prospective buyers has also gone up, for the 14th month in a row.

RICS said that the recent increase in interest rates would have little effect in dampening the market.

"A strong economic outlook and improving employment prospects will hold up the confidence of households," said RICS spokesman Jeremy Leaf.

House prices are now rising in all regions of the country, led by London and the South-East.

Squeeze on prices

Despite property becoming more and more expensive for first-time buyers, RICS predicts that house prices will be squeezed higher by a fall in the number of new properties being put on the market for sale.

According to its survey, these dropped in July for the second month in a row.

Their number has now fallen by 10% over the last year - and that has pushed the stock of unsold properties to its lowest level since September 2004.

Yesterday the Department for Communities and Local Government (DCLG) - formerly the ODPM - said prices had slowed down recently.

Its own survey suggests that prices rose by 5.2% in the year to June, down slightly from 5.6% in May.

But most other indicators point to prices rising faster in the coming months.

Last month, the Bank of England reported that mortgage approvals, a very good indicator of future trends, had risen to their highest level for five months.