House prices grow at fastest pace in five months in March, says RICS

LONDON (ShareCast) - UK house prices grew at the fastest pace in five months in March, as a shortage of properties fuelled speculation the cooling in the market might be coming to an end. According to figures released by the Royal Institution of Chartered Surveyors' (RICS) monthly house price balance rose to +21 in March from +15 in February.

Sellers were refraining from putting properties on the market because of the uncertainty surrounding the General Election.

However, Simon Rubinsohn, RICS' chief economist, said: "underlying the trends visible in the latest survey is a very real housing crisis which will urgently need to be addressed by the next government." With less than a month until British voters go to the polls, housing is becoming an increasingly big issue in the lead-up to the elections.

On Tuesday, Prime Minister David Cameron said he would extend the "right-to-buy" scheme to allow families to buy properties, including social housing owned by non-profit groups, at a cheaper price than the current market rate.

However, Labour dismissed the proposal as a "bribe" to voters, adding that Cameron was "running out of ideas" to convince people to vote for his party.

The net balance of surveyors who expect prices to rise in the next 12 months reached a 10-month high of 70%.

Stabilisation in London house prices may only be temporary The divergence between house prices in London and the rest of the country continued, analyst Alastair Stewart at Westhouse Securities pointed out.

Although the rate of decline slowed in the capital, it is "possibly only temporary", he said.

"Our main concern about London continues to be the massive pipeline of new developments likely to hit the market over the next two years plus spiralling costs and potential delivery disruptions."