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House prices expected to increase amid growing demand

Sales of new homes across the UK increased for the third month in a row in February, according to RICS. (Getty)

UK property prices appear to be going up amid growing demand from buyers, according to surveyors.

A net balance of 29% of surveyors reported a rise in house prices in February, up from a balance of 18% the previous month, according to the February 2020 Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey.

Furthermore, a net balance of 22% of surveyors expect house prices to continue to increase over the spring, RICS said.

Sales of new homes across the UK increased for the third month in a row and a net balance of 20% of property professionals saw an increase rather than a fall in inquiries from new buyers in February.

Experts are predicting an improved sales outlook for the rest of the year, with 61% saying they expect more homes to be sold in 2020.

However, optimism has been tempered by concerns about the economic impact of the coronavirus outbreak and whether it will influence viewings and the traditional spring house selling season.

Read more: Halifax warns on coronavirus risk to UK housing market recovery

London, Yorkshire and the Humber, and East Anglia saw the greatest uplift, although all regions of the UK experienced growth in the property market.

The number of new homes coming onto the sales market also went up for a third consecutive month, with the West Midlands and the South East seeing the most new properties arriving onto the market.

Simon Rubinsohn, RICS chief economist, said: “It is encouraging that the results of the latest survey continue to show a positive trend both in terms of potential buyer interest and new instructions to agents. Indeed, this is the first time since 2014 that new supply to the market on the RICS indicator has increased for three consecutive months.

 “Inventory levels are still at historically low levels despite this but the firmer trend in appraisals suggests that the picture could improve over the coming months providing the coronavirus doesn’t become more of an inhibitor of activity in the sector.

 “For now at least, feedback around expectations are consistent with activity levels continuing to strengthen albeit relatively modestly.”

Residential lettings also saw a rise in demand from tenants looking to rent a home. However, the number of properties listed by landlords for rent continued to decline ⁠— extending a trend seen since it was first recorded in 2016.

Read more: Regulator cracks down on mis-selling of leaseholds

A growing demand for rental properties combined with falling supply could increase rents by 2% to 3% per year by 2025 if the trend continues.

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