House price growth slowing

The rate at which UK property prices are increasing appears to be falling off.

According to the latest monthly survey carried out by the Royal Institution of Chartered Surveyors (RICS) of its members, prices were rising at 35% of its agents, but falling at 8% in February, giving a balance of 23% reporting higher prices. That compares to 29% in January.

RICS says that price increases could be subdued by an increase in supply of property to the market, as new instructions to sell property outpaced inquiries from new buyers for the second consecutive month.

The surprise recovery in property values, which grew considerably in the latter half of last year was largely attributed to lack of supply, as nervous homeowners worried about the economy sat on their hands.

However, despite the changing balance between supply and demand, more RICS members reported rising prices than falling.

Spokesperson Jeremy Leaf says:

"There was a resumption of interest in the housing market following the fall that took place in January, which was due partly to the extreme weather conditions during that month and the reversion back to the previous Stamp Duty regime.

"The magnitude of the gains going forward is likely to continue to ease, reflecting the fact that new supply coming on to the market is starting to outstrip fresh demand."

The total number of sales recorded by RICS members continued to suffer from the knock-on effect of the cold weather at the start of the year. As a result, the number of sales per Rics member remained at 1.4 per week.

Leaf says: "Surveyors still expect sales to increase, indicating that the recent drop in transactions is a reflection of recent adverse weather conditions.

"Activity is expected to rise over the coming months after the recent lull with surveyors also anticipating that prices will continue to edge upwards.”