LONDON (Reuters) – British house prices rose in April at the fastest rate since June 2021 as demand again outstripped the number of homes for sale but surveyors trimmed their expectations for future price rises as inflation pressures intensify.
The Royal Institution of Chartered Surveyors (RICS) said there was a +80 percentage point difference between the proportion of surveyors reporting rising prices and those reporting a fall, up from +74 in March.
This was the highest since June and well above forecasts in a Reuters poll of economists which had pointed to a fall to 70.
Previously published figures from mortgage lender Nationwide showed the annual rate of house price increase slowed to 12.1% in March from an 18-year high of 14.3% in March.
RICS said the proportion of surveyors expecting rents to rise over the next three months was the highest since this record began in 1999.
“Even though there is a lot of caution about the future economic landscape, it seems that limited supply available on the market, coupled with steady demand growth, are still the overriding drivers of house prices,” RICS economist Tarrant Parsons said.
Last week the Bank of England forecast consumer price inflation would exceed 10% in the final quarter of this year, as surging prices for energy and other imports cause the second-biggest fall in living standards in over 50 years.
The BoE has raised interest rates four times since December, and financial markets see rates reaching at least 2% by the end of the year, twice their current level.
However, the impact of rising prices is unevenly felt. Many richer households still have significant savings built up during the COVID-19 pandemic when spending options were limited and working from home boosted demand for more spacious housing.
RICS said its members reported an eighth successive month of rising numbers of enquiries from potential home-buyers while supply was flat.
A large majority of surveyors expected house prices to rise over the next 12 months, although the balance of +62 was down from +78 in February.
UK house price gauge highest since mid-2021, slower rises ahead-RICS