The latest round of house price and mortgage lending reports has revealed a sharp decline in available properties, whereas record borrowing levels have forced prices up faster than at any time since 1999.
The news has increased speculation that the Bank of England's monetary policy committee will raise the base rate of interest from its current level of 4% sooner rather than later.

In its monthly survey of the housing market, the Royal Institution of Chartered Surveyors said the number of its members reporting a price rise during the three months to April had outstripped those reporting a fall of 63%. This was the highest figure since November 1999.

The RICS said it expected the upward movement of prices to continue because the average number of properties coming on to the market was at its lowest level since 1979.

Ian Perry, national housing spokesman for the RICS, said: "There would appear to be no end in sight to the rise in prices."

This view was supported by the British Bankers Association and the Council of Mortgage Lenders, both of which reported record lending increases during April.

The BBA said mortgage lending rose by £4.2bn, topping March's record £4bn.

It cited "the consumer feel-good factor" about continued low interest rates as the explanation for the figures.

The CML, reporting a new high last month of £16.9bn in new mortgage lending, said it expected the growth in borrowing to slow by the end of the year.

The lending figure for March stood at £16.1bn, 46% higher than a year ago.

Source

Housing Today