U.K. RICS House-Price Index Rises as Agents Have Less to Sell
By Brian Swint
April 12 (Bloomberg) -- U.K. house prices rose at a faster pace last month as the number of unsold properties on agents' books fell to the lowest in almost three years, the Royal Institution of Chartered Surveyors said.
The number of real-estate agents and land surveyors reporting higher home values in England and Wales outnumbered those showing declines by 26 percentage points, the most since January, the London-based organization said today. The average number of unsold homes per surveyor fell to 60, the lowest since June 2004.
Today's report suggests that three interest-rate increases have failed to cool Britain's property market, where a shortage of homes helped drive prices up about 10 percent last year. Investors expect the Bank of England to raise borrowing costs again in the first half.
``The housing market has absorbed the initial interest-rate barrage,'' said Jeremy Leaf, a spokesman for RICS. ``House prices are unlikely to fall in the short term while the economic outlook remains robust.''
Traders are betting that the central bank will raise the benchmark interest rate from the current 5.25 percent. The yield on the June futures contract was at 5.72 percent yesterday. The contract settles to the three-month London interbank offered rate for the pound, which averaged about 15 basis points more than the central bank benchmark for the past decade. A basis point is 0.01 percentage point.
HBOS Report
U.K. house-price inflation accelerated to 11.1 percent in the first quarter, the fastest pace in two years, HBOS Plc, the country's biggest mortgage lender said April 5. U.K. mortgage lenders approved more home loans than expected in February, a Bank of England report showed March 29.
The RICS index showed prices of more homes rising than falling in all 12 of the regions surveyed, RICS said.
The index had declined for four months before this report. While fewer new buyers registered to browse properties March, the pace of the decline halved, RICS said today. The number of new properties coming to market rose for the first time in nine months, led by the North West and the East Midlands.
Interest rates may still damp demand, RICS said in the report, citing a housing slump in 2005 following an increase in borrowing costs a year earlier. ``History tells us that further rate rises could knock confidence and activity significantly later in the year,'' Leaf said.
The Bank of England expects economic growth to accelerate to around 3 percent this year from 2.8 percent in 2006. One more interest-rate increase will be needed to bring consumer-price inflation back to the 2 percent target, according to the bank's forecasts published Feb. 14.
London Prices
In London, the RICS house-price index rose to a non- seasonally adjusted 84 last month, the highest since June 1999. When adjusted for seasonal swings, the index for the capital rose to 57, the highest since January.
The price of London's most expensive homes rose an annual 32 percent last month, real estate broker Knight Frank LLC said yesterday. The average value of a first-time buyer's house has tripled in the past decade to 141,229 pounds ($279,000), a separate report from the statistics office showed, outpacing the 92 percent gain in their average salary since then.
To contact the reporter on this story: Brian Swint in London at
[email protected] .
Last Updated: April 11, 2007 19:01 EDT
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