House price inflation reached a plateau in November but market conditions remain strong, according to the latest housing market survey from the Royal Institute of Chartered Surveyors.
In November, 47.4% more chartered surveyors reported a rise than a fall in house prices, which was down from 47.7% in October but still more than double the long run average of 21%.
RICS says the market absorbed last month’s interest rate rise and the financial services sector, in particular, boosted the markets of London and the South East where a respective 75% and 61% more chartered surveyors reported a rise than a fall in house prices.
Scotland continues to experience buoyant conditions, with 56% more chartered surveyors reported a rise than a fall in house prices, but this compares with a figure of 82% in October.
In the North, 35% more chartered surveyors reported a rise than a fall in house prices in November, compared with 31% in Yorkshire and Humberside, 41% in the North West, 12% in the East Midlands, 23% in the West Midlands and 64% in East Anglia.
Overall completed property sales rose by 20% compared with November 2005, the biggest gain since March 2002.
Jeremy Leaf, a spokesman for RICS, says the survey will give no joy to first-time buyers at Christmas and he suggests the Chancellor needs to tackle the affordability problem in the Budget.
He adds: “While concerns remain about high consumer debt levels, households still view their finances as strong. A further interest rate rise in the new year may have a mid-term effect. We expect house prices to rise by 7% following a 9% jump in 2006.”
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