House prices rise as demand outstrips supply

House prices are likely to keep on rising in the near future, the RICS said today as it released figures showing values had grown again in October.

The body’s monthly housing survey showed the balance of surveyors reporting rises rather than falls hit 34% in October, up from 20% the previous month, and the highest result since December 2006.

London showed the strongest results, with a reading of 95%, the highest recorded since December 1996.

The RICS said demand from buyers was still outstripping supply in spite of evidence that vendors are beginning to return to the market and this was likely to keep pushing prices up for the time being.

RICS spokesperson, Jeremy Leaf, said: “Although the supply of property is beginning to pick-up, it is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term.

“Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders.”