Homeowners' rush to sell points to fear of crash

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The Independent Online

Homeowners are rushing to put their homes on the market, hoping to sell up before rising interest rates trigger a property crash, according to a report.

The Royal Institution of Chartered Surveyors said its members reported a sharp spike in new instructions last month.

It said 41 per cent more surveyors reported a rise in instructions than a fall, compared with the 9 per cent weighting towards a fall in December.

"RICS believes this is due to the fact that many sellers started the year fearing that the house price bubble might burst and have put their property on the market as soon as possible," it said in its monthly survey. "Rising interest rates and the threat of an ongoing upward trend may also be putting financial pressure on some households to sell."

But it said a rebound in enquiries from potential buyers - which rose at the fastest pace since last September - suggested that buyers had shrugged off speculation over rising interest rates.

RICS said house prices continued to rise steadily across the UK, with 38 per cent more surveyors reporting a rise in prices than a fall - the same margin as the previous month.

The North West recorded the strongest activity since the survey began, while the weakest pace of price increases continued to be in the South East. Confidence among RICS members was highest in London, which it said might be due to the recovery in the financial markets over the past few months.

"The tension in the housing market is lifting," said Ian Perry, RICS' housing spokesman. "The hint of rising interest rates has brought more houses on to the market but buyers seem undeterred and as enthusiastic as ever to enter the market."

He said he expected rising mortgage rates to "put a dampener" on the market but said the positive economic environment would prevent a marked slowdown.