Housing market enjoyed August surge

Two new surveys published today show that the property market scaled new highs yet again in August.

The RICS UK Residential Market Survey reported that house price growth gathered pace as market conditions tighten and the lack of new instructions holds back sales growth.

The latest Mortgage Monitor from e.surv showed mortgage approvals for house purchase hit to an 18-month high in August after a surge in mortgage lending.

This leaves the property market in a buoyant position, with RICS predicting that house prices will rise by 6% this year, up from a prediction of 3% at the start of the year.

This is reinforced by the continued imbalance between falling new instructions and rising buyer demand.

Simon Rubinsohn, RICS chief economist, said: “Given current market conditions, the latest data unsurprisingly shows house prices continuing to rise, and at an accelerating pace.

“As such, house price inflation has now quickened in each of the last seven months following a sustained period of easing towards the latter half of 2014.

“And there is good reason for this trend to be sustained into next year, however uncomfortable that may be for those looking to enter the market, given that so many of our members are telling us that they are struggling to replace the stock they have sold.”

There were 69,220 house purchase approvals in August, according to e.surv, up 9.3% from 63,340 in the same month last year.

On a monthly basis house purchase approvals rise 0.7%, the third consecutive month of growth.

August saw a post-recession record for small-deposit lending in August, with 12,000 mortgages approved.

Richard Sexton, a director of e.surv, said: “While the global economy has been walking on eggshells as China’s economy stalls, the UK housing market has been striding forward on much firmer ground.

“Weak inflation and recovering wages mean that more British workers are able to meet the stringent affordability requirements demanded by MMR and obtain the mortgage they want.

“Concerns over an interest-rate rise may have helped push some borrowers into acting quickly.

“However, this is now the third consecutive month of growth, and home lending has been strong since May.

"Healthier mortgage lending reflects a stronger UK economy and an upturn in fortunes for British buyers.”