Page last updated at 10:22 GMT, Tuesday, 12 January 2010

House price rises slowed in December, surveyors say

Looking in an estate agent's window
Prices will keep on rising in 2010, Rics predicts

The pace of house price increases slowed at the end of 2009, the Royal Institution of Chartered Surveyors (Rics) has said.

Its survey for December found that 30% more surveyors saw prices rise than fall during that month.

However, the positive balance was lower than in either October or November.

The government's own housing survey has found that UK property prices rose by 1.7% in November, leaving them 0.6% higher than in November 2008.

The figures, published by the Department for Communities and Local Government (DCLG), confirm the upward trend in prices recorded by other house price surveys during the course of 2009.

The government figures put the average UK house price at £200,454, and suggest that the pace of price increases picked up during the six month period to November.

The increase in demand [for properties] still appears to be outstripping the increase in supply
Royal Institution of Chartered Surveyors

"UK house prices rose by 3.5% in the quarter ending November 2009," the DCLG said. "This compares with a smaller rise of 2.6% for the quarter ending August 2009."

The DCLG figures showed that average prices have dropped by 11.6% in Northern Ireland in the past year.

In Scotland prices rose by 2.4%, in Wales values climbed by 2.2%, while in England prices edged up 0.6%.

Estate agents

The survey from Rics showed that its members who work as estate agents continued to sell 1.5 homes a week on average, while the number of enquiries they received from new buyers rose at their slowest rate since January 2009.

Rics spokesman Jeremy Leaf said the end of year slowdown was just the normal seasonal trend.

"The recent loss of momentum in prices and the moderation in new buyer interest can be in part attributed to the housing market pulling down its shutters for Christmas," he said.

"It is likely that the new year will see more interest and activity in the market as those who held back start to market their property with renewed optimism."

However, Mr Leaf said a lack of properties for sale was continuing to support house prices.

"New enquiries are continuing to outpace new instructions which is helping to push house prices higher," he said.

Regional differences

Last year saw a surprising rise in UK house prices from the spring onwards.

The main factors behind the rise that commentators pointed to were the record low level of interest rates, the dearth of properties being put up for sale, and the willingness of parents to help fund the home purchases of their children.

Rics said its December survey showed a rise in new sale instructions for the seventh month in a row.

But these were still outweighed by fresh enquiries from potential buyers.

"For the time being the increase in demand still appears to be outstripping the increase in supply, albeit at a more modest pace than previously," Rics said.

Price increases are still most widespread in London and the South East, though prices are still falling steeply in Northern Ireland, with smaller falls still being recorded by Rics members in Wales and the West and East Midlands.

UK annual house prices graph

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