House prices bounced back in March as the market absorbed the first round of interest rate rises, according to the Royal Institute of Chartered Surveyors.
The latest RICS housing Markey survey reveals house prices rose for the 17th consecutive month in March, with the pace of increase picking up for the first time in five months.
RICS says 25.5% more chartered surveyors reported a rise than a fall in house prices, up from 24.8% in February, and the pace of increase remains above the long-run average of 21.6%.
New buyer enquiries declined for the fourth consecutive month, with 8% more chartered surveyors reporting a fall than a rise in new buyer enquiries compared to 19% in February.
The survey also reveals new instructions to sell property have risen for the first time in nine months, rebounding from the longest decline in seven years, but RICS says the figures are skewed by unusually large increases in the North West and the East Midlands.
The stock of unsold property on surveyors’ books fell to the lowest level since June 2004 – average stocks per surveyor were 60.1% in March compared to 62.4% in February and 16.8% lower than one year ago.
Jeremy Leaf, spokesman for RICS, says: “The housing market has absorbed the initial interest rate barrage, but history tells us that further rate rises could knock confidence and activity significantly later in the year.
“However, house prices are unlikely to fall in the short term while the economic outlook remains robust. Market conditions remain tighter than ever with households as yet under no pressure to sell, though mortgage repayments remain a concern for many following the Bank of England’s recent monetary tightening.”
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