House prices 'power ahead'

The North of England is leading the way, with London continuing the trend of recent months and lagging behind.

Lack of houses for sale is cited by RICS as the reason for the continued growth of the house price bubble.

But a separate house price survey from the property website Rightmove.co.uk found house prices fell last month for the first time since January.

Northern explosion

In the north 81% more chartered surveyors reported a rise in prices than reported a fall, the highest ever figure.

The national figure for the month was 54%, while in London it was just 14%.

The London property market has long been expected to cool as a result of job losses and bonus cuts in the City.

Looking ahead, chartered surveyors expect price rises to continue for the next three months with 36% more contributors expecting prices to rise than fall, against 34% last month.

RICS national housing spokesman, Ian Perry, said: "The market continues to power ahead. Despite many pundits speculating on how much longer rapid price rises can be sustained, they show no signs of slowing down before the end of the year."

Mr Perry added that the ongoing shortage of property for sale and low interest rates are driving prices ever higher.

Bubble bursting?

The study by the Rightmove website found that prices edged lower by 0.2% last month, although the annual rate of increase was still a healthy 22.2%.

Rightmove said the number of properties coming on to the market was still falling, but that this was no longer pushing prices higher.

"We expect that the market will stay flat until after the Christmas break, with reduced levels of activity and the possibility of further price decreases in December and January," Rightmove said.

London led the decline, with asking prices in the three months to November falling in nine boroughs.

Rightmove said average house prices now stood at 6.19 times average earnings, an "unprecedented" figure which was only made possible by low interest rates.

"If interest rates rise in the new year, the affordability of property will quickly become unsustainable," Rightmove said.