House prices rise despite more properties on market

House prices continued to rise in November - despite an increase in the number of properties available.

According to its November survey, RICS says demand continues to outstrip supply, with 28% more surveyors reporting an increase in enquiries from potential purchasers.

The robust demand has had a knock-on effect on prices, with the majority of surveyors reporting rising rather than falling prices for the fourth month in a row. A net balance of 35% of chartered surveyors said prices were rising, up from 34% in October.

The continued increase in prices is surprising given the fact more properties are coming onto the market. The sales to stock ratio - a measure of market slack and a lead indicator of future prices - climbed a little further in the month. It has now risen for the past 12 months and stands at 31%.

Although the latest survey provides further evidence the sector is improving, the pace of recovery appears to be slowing.

The number of respondents feeling positive about the outlook for prices dropped slightly, with 28% of chartered surveyors thinking prices will continue to rise rather than fall over the next three months. This is down from 31% for the previous month.

London and the South East continue to be the most buoyant regions with buyer enquiries remaining strong.

RICS spokesperson Ian Perry says the housing market is bucking economic trends and expects a new wave of demand as conditions improve. 

"For the fourth month in a row, the survey points towards prices rising, even though the general state of the economy would suggest that the housing market should not be faring as well as it is.

"Despite modest increases in the number of properties coming on to the market, it is clear that this is not significant enough to keep pace with the levels of demand. Buyer enquiries are continuing to grow and with the pace of job losses now easing, the risk is that the new year could see a further wave of interest in the market."