Strong demand pushes up houses prices

The housing market remains at its strongest in London as house prices continued to rise during November, according to the latest Royal Institution of Chartered Surveyors (RICS) research.

RICS said 35 per cent more of its members reported a price increase during the month than those who reported a fall - the highest level since November 2006.

These findings have been revealed despite an increase in the number of homes put up for sale.

In recent months the majority of chartered surveyors have reported more rises than falls in the number of new instructions. In spite of this, demand continues to exceed the number of homes going up for sale, with a further 28 per cent of surveyors reporting an increase in enquiries from potential buyers.

Rics says the higher number of enquiries has been the main factor behind the recent rise in property prices. In November, house prices rose by 1.4 per cent, according to the Halifax house price index.

However, the pace of recovery is slowing as respondents become less positive about the outlook for home prices.

Twenty-eight per cent of chartered surveyors believe prices will rise, down from 31 per cent in the previous month.

Recently, experts have cautioned against jumping too hastily into the property market, with many predicting a price correction in the second half of next year.

Some say the recent rebound in property prices have been driven primarily by homebuyers with enough cash to secure a purchase.

In spite of this, demand for homes remains strong.

Ian Perry of Rics said: “For the fourth month in a row now, the survey points towards prices rising, even though the general state of the economy would suggest that the housing market should not be faring as well as it is.

“Despite the modest increases in the number of properties coming onto the market, it is clear that this is not significant enough to keep pace with the levels of demand.”

Mr Perry said a further wave of interest in the property market could emerge next year.