© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
July 9, 2013 12:02 am
The housing market will heat up across the UK over the summer months, according to a survey that shows optimism at its highest level for 14 years.
The Royal Institute for Chartered Surveyors said on Tuesday the industry was now more confident that sales will rise across in England and Wales in the coming quarter than at any point since the trade body began polling members in 1999.
The poll – considered one of the most reliable guides to movements in house prices – showed surveyors expected an average 1.5 per cent increase in house prices nationwide over the next year.
Nowhere in the UK, including Northern Ireland – the area worst hit by the housing crash, did surveyors expect to see sales decline.
Prices would rise everywhere bar the north of England. For only the second time since 2007, prices in Northern Ireland are forecast to increase.
“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,” said Peter Bolton King, a director at Rics. “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.”
While the industry welcomed signs of a recovery, the release of the influential poll, closely watched by the Bank of England’s Monetary Policy Committee, comes amid concern from policymakers that the UK’s housing market could overheat.
Despite falls in prices in some regions, housing in the UK remains expensive by historical standards.
The government this spring launched a scheme, called Help to Buy, aimed at nudging more first-time buyers on to the property ladder and prodding the construction industry to build more homes.
But officials at the BoE and the International Monetary Fund, along with their counterparts at the UK’s fiscal watchdog, the Office for Budget Responsibility, have warned that the scheme risks stoking a bubble while doing little to improve housing supply.
The BoE has also recently called for an inquiry over fears that a rise in interest rates from their current record-low levels could leave many homeowners unable to keep up with repayments.
The Rics poll tallies with other evidence that mortgages are becoming easier to obtain. First-time buyers, existing homeowners and, to a lesser extent, buy-to-let owners now require smaller deposits for house purchases as banks relax lending standards for riskier borrowers.
A net balance of 45 per cent more respondents in England and Wales predicted sales would increase in the coming three months, up from 36 per cent in May and the most positive reading since the poll began in April 1999. 23 per cent more respondents reported that they expected prices to rise rather than fall over the coming three months.
Twenty one per cent more respondents reported prices rose rather than fell in June – the strongest reading since January 2010.
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.