Market lively in ?1m houses

Million pound-plus houses are continuing to change hands at a rapid rate despite the UK economic downturn, top-end estate agents Countrywide Assured and Savills disclosed yesterday.

The news came as it emerged that house prices are rising at their fastest pace for more than a year.

A new survey from the Royal Institution of Chartered Surveyors (RICS) said fierce competition between mortgage lenders and cuts in the interest rate had helped boost an already buoyant market, and added that current conditions "bode well for the coming months".

During the three months to May, 47% more surveyors reported rising prices than reported a fall - the highest figure since March last year.

London has seen particularly strong price growth, which has resulted in a narrowing of the price gap between the north and the south, said the RICS.

"It is an encouraging sign for homeowners that the market has remained strong in the first part of the year, despite the many pressures that could have affected it," it added.

Countrywide and Savills endorsed this saying there has been little let up in the exclusive end of the residential housing sector and that business is just as good if not better than last year. But otherwise the fortunes of the two companies were mixed.

Announcing that trading is ahead of expectations for the six months to June 30, Countrywide managing director Harry Hill said: "In the case of our John D Wood estate agent brand, business couldn't be better."

Savills, however, was forced to issue a profits warning, blaming poor performances in its Yorkshire retail park and commercial rental businesses.

Broker Mark Young at ABN Amro cut his £28.5m pre-tax profits forecast by 16% to £22.5m and the shares shed 34.5p to 197.5p.

Countrywide, which is a pure estate agency business that takes in the Bairstow Eves and Mann & Co brands, dealing with the lower as well as the upper end of the UK housing market, said that property prices on exchange have risen by £9,000 to an average £106,000. Its shares jumped 6p to 115.5p.