House prices continued to rise last month, despite a sharp increase in the number of homes for sale.House prices continued to rise last month, despite a sharp increase in the number of homes for sale.
The proportion of estate agents reporting a rise rather than a fall in new instructions from homesellers increased from 11 per cent to 23 per cent between April and May, the Royal Institution of Chartered Surveyors said.
At the same time, the proportion of surveyors reporting price rises rose 3 per cent as demand from buyers remained steady.
The institution said that the number of sellers was likely to rise further as the Government’s decision to scrap home information packs is likely to persuade even more homeowners to test the market — a trend that could lead to price falls. The balance of surveyors expecting a rise rather than a fall in prices dropped slightly, from 7 per cent to 5 per cent, as confidence in the pace of recovery begins to subside.
Last week Savills, the estate agency, predicted a “second slip” for the housing market, amid signs that austerity measures could knock the heat out of demand.
The level of sales per surveyor has remained static, at 17 for the three months to May 31. Simon Rubinsohn, chief economist at the institution, said: “Surveyors are generally confident that sales will continue to pick up over the summer months. The increase in supply as a result of the abolition of HIPs is helping to support this optimism despite continuing concerns about mortgage finance. A higher level of instructions should lead to a flatter trend in house prices in the latter part of the year.”
London and the South East continued to move ahead of the rest of the market. There were modest price falls in Wales, Yorkshire and Humberside and the West Midlands.
Agents in London said that a rise in capital gains tax could knock the recovery off course. Benson Beard, of Bective Leslie Marsh, said: “The Budget will determine the market for the rest of the year. CGT especially. Any rise should be limited at the higher level to short-term gains. Long-term gains should be tapered.”