House prices show marked increases

House prices rose at their fastest rate since the end of 2002 during September, figures showed today.

The Royal Institution of Chartered Surveyors said uncertainty over the state of the market, seen earlier in the year, had given way to renewed confidence, boosted by very low interest rates and stable employment conditions.

The group said 34% more chartered surveyors reported an increase in house prices during the three months to the end of September than those who said there had been a fall, compared with just 9% in August.

At the same time economic improvements sparked the biggest increase in people looking to buy a new house for more than four years, with 49% more surveyors reporting an increase in buyer enquires, more than double the 18% who saw a rise the previous month.

Property sales also rose to an average of 29 per chartered surveyor estate agent, up from 27 in August, and although this was 22% lower than during the same period in 2002, it suggested activity was recovering.

Going forward, 43% more surveyors expect house prices to rise over the next three months than those who think they will fall, while a similar proportion expect sales to pick up following the surge in inquiries from potential buyers.

"We would expect to see market activity rise in September as people turn their attention away from summer pursuits and focus on moving house, but this year it has picked up more than usual," said RICS housing spokesman Jeremy Leaf. "However, the market remains patchy with some notable hot and cold spots."

The largest price increases continued to be seen in northern areas of the country such as the north, Yorkshire and Humberside and the north-west, while the market in Wales also remained quite strong.

Prices in London rose slightly for the first time since December, while modest increases were also reported in the south-east and south-west.

The report follows a survey released yesterday by property website Rightmove.co.uk, which said asking prices rose by 3.3% in October - the largest rise in 18 months.

Mortgage lending also hit a record high in September, according to the Council of Mortgage Lenders, with the total amount lent by banks and building societies totalling ?25.7bn.