Countrywide says house price rise is due to British `greed'

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ONE OF the UK's leading estate agents yesterday predicted that house prices will rise by 12 per cent this year, and attributed the rise to a natural greed on the part of the UK population.

Harry Hill, managing director of Countrywide Assured, said the group's fees from exchanges were at record levels. However, he denied there was a housing boom as the number of sales remained almost flat on last year. He attributed the rise in prices to a shortage of supply.

"There's an in-built greed in the British population, and if people think they can get an extra pounds 2,000 by holding out a few weeks, they will," he said. "We know that profits in the second half will be extremely strong."

He expected the prices of Countrywide's properties to have risen by 10 to 12 per cent over the year by year-end, and the number of transactions in the UK as a whole to reach 1.45 million. In 1988, there were 2.2 million transactions.

The group, which also offers mortgages, surveys and conveyancing, has been forced to hire local surveyors to meet demand. Countrywide posted record profits of pounds 28.6m, up 51 per cent, in the half year to 30 June. Almost 60 per cent of profits came from the sale of financial services such as life assurance and mortgage protection.

However, its housing division was weak. The number of house exchanges it handled rose by 4 per cent to 42,044 in the first quarter and the group's estate agency business fell into the red.

The group failed to be shortlisted as a purchaser for any of the estate agencies Halifax announced it was selling in April because it was unwilling to pay premium prices. Countrywide also passes the majority of its mortgage enquiries on to Nationwide, Halifax's still-mutual rival. "Halifax does not see why they should pass us any business," said Mr Hill.

Investment, page 19