House buyers are paying 'over the odds' says RICS

Some buyers are being forced to pay "over the odds" to secure their home, an estate agents organisation says in a report released today that also reveals a fresh surge in prices.

Some buyers are being forced to pay "over the odds" to secure their home, an estate agents organisation says in a report released today that also reveals a fresh surge in prices.

A shortage of properties and a continued surge in interest from buyers had pushed prices up at their fastest pace for 18 months, the Royal Institution of Chartered Surveyors said.

But there was little sign that heated speculation of an imminent price crash had curbed buyer interest or triggered a rush by homeowners to put their properties on the market.

"The expected springtime flood of properties on to the market has just not materialised," said Jeremy Leaf, RICS's housing spokesman and a London surveyor. "Many people are realising that the current number of houses for sale is as good as it gets for now and are looking to buy quickly rather than risk paying more for a similar property over the coming months.

"Some buyers are paying over the odds in order to secure a property and we need to caution against the market overheating again."

Its survey of members showed the number reporting rising prices last month outnumbered those seeing a fall by 46 per cent - the strongest number since October 2002.

The stock of properties on agents' books clung close to the 25-year low hit in 2002 while inquiries from buyers remained healthy.

The survey showed surveyors were optimistic about the market going forward, with a balance of 35 per cent expecting prices to rise over the coming three months, slightly down from March's 38 per cent.

They are most optimistic over Northern England and Wales but confidence in the South has started to pick up.

The Bank of England last week said it believed the housing market was on a sounder footing than during the boom of the late 1980s, saying interest rates would need to rise to 9 per cent to inflict as much pain as homebuyers endured in the 1990s crash.

Meanwhile, estate agent Knight Frank said the cost of a home in one London street had soared by 12 per cent since the beginning of the year.

The group said prices in Chester Terrace in Regents Park now averaged £2.9m, while in Davies Street, Mayfair, they had risen 9 per cent in the first four months of the year to £2.7 million.

Prices in Ilchester Place, Kensington, and Upper Brook Street, Mayfair, had soared 7 per cent this year to average £6m and £3.95m, respectively.

Overall, Knight Frank said the price of homes in the capital worth more than £500,000 had risen by 2.8 per cent since the beginning of the year as the shortage of properties continued to push prices up.

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