House sales rose at their fastest rate for 16 months in September, helping to limit price growth, according to the Royal Institution of Chartered Surveyors (RICS).
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The insitution says on average rents across England and Wales will rise by around 3.0 per cent next year as there remains no likelihood of supply meeting demand.
The September reading was at the bottom end of the range of forecasts from economists polled by Reuters who, on average, expected a further increase to +55. “Against this backdrop, we expect prices to move higher over the coming months”.
The RICS said the North, East Anglia and Scotland posted the sharpest rises in sales but the number of new instructions had fallen in 13 of the past 14 months.
The survey comes as earlier this week Halifax said property prices in the three months to September were 8.6 per cent higher than in the same three months previous year.
Sarah Speirs, the director of RICS in Scotland, said: “Activity is now picking up which is encouraging and we are seeing slight improvements in stock coming on to the market, although this is still falling short of demand”.
Speaking at the Conservative Party conference in Manchester on Wednesday, David Cameron pledged to encourage developers to build more affordable houses.
The balance between respondents reporting a rise in prices minus those reporting a fall dropped to +44 in September from +53 in August, when it touched its highest level in more than a year.
Cheaper and more available credit has helped prop up demand for homes and despite tougher checks on people applying for mortgages introduced by the Bank of England previous year, mortgage lending continues to increase.
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“As a result of the persistent supply demand imbalance, the national house price indicator continues to rise strongly which is likely to be reflected in key house price indices over coming months and into the first half of 2016”, the trade body said in a statement. BoE officials have not sounded as concerned about the housing market since then.
