House prices rise for first time since mid-2010, finds surveyors report

Government measures responsible for pickup in demand that has yet to be matched by increase in supply, says Rics

Fresh evidence that Britain's housing market is recovering from its long post-recession torpor has emerged as estate agents report the first upward trend in house prices in almost three years.

The Royal Institution of Chartered Surveyors (Rics) said the government's Funding for Lending Scheme (FLS) and the Help to Buy initiative announced in the budget were responsible for a strong pick-up in demand for residential property that was not yet being matched by an increase in the supply of homes to buy.

Funding for Lending Scheme (FLS) and the Help to buy initiative will lead to higher house prices if new residential developments are delayed, warns Rics.

In its monthly health check of the property market, Rics said conditions were at their most buoyant since mid-2010, when the economy was recovering from the deep slump of 2008-09.

The report showed that buyer interest picked up sharply at the start of spring. Estate agents reporting a demand for property topped those reporting fewer new customers by 25 percentage points.

An increase in the number of buyers prompted sellers to put their homes on the market, but the upward trend in new instructions was less strong than demand. As a result, Rics said it had seen the first increase in prices last month since June 2010.

Peter Bolton King, its global residential director, said: "It is encouraging to see government initiatives are having an impact on the property market. Help to Buy, in combination with the Funding for Lending scheme, appears to be giving the market a shot in the arm. Sales are expected to pick up over the coming months, albeit from historically low levels.

"However, there are some understandable concerns that the measures will also lead to higher prices. In view of this, it is critical that developers are as good as their word and speed up the delivery of new stock."

The Rics report showed that surveyed members had sold 17.1 properties on average over the past three months. Although the performance in March and April has been the strongest in three years, transactions are at only half the level when the market was at its peak a decade ago, and a third lower than in the period leading up to the financial crash of 2007.

With other surveys of the housing market also providing signs of stronger demand, estate agents believe prices will continue rising for the rest of 2013. London Rics members were the most upbeat about the outlook, but prices are expected to go up in every region of the UK bar Northern Ireland.

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Article source : http://www.guardian.co.uk