House prices risk becoming 'unsustainable' as sales hit six-year high in December

Mortgages at the fourth highest monthly level since December 2007

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The Independent Online

The number of homes sold per chartered surveyor is now at its highest point since March 2008.

The latest report from the Royal Institution of Chartered Surveyors shows the average number of transactions per surveyor in December was just over 21, double the lowest point of January 2009.

"The housing market is starting to thrive once more," said Peter Bolton King, RICS Global Residential Director. "Sales are at their highest level in almost six years and this is being reflected right across the UK. Growing availability of affordable mortgages has released some pent-up demand from a market that, in recent years, has seen many viable buyers unable to enter the market. On the face of it, this seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at a price rises becoming unsustainable in some areas.”

The figures follow the Council of Mortgage Lender's latest report which indicates that while the total number of mortgages made to homeowners fell slightly in November 2013, it was still the fourth highest monthly level since December 2007. 

First-time buyers took out 27,000 mortgages in November, a slight rise of 0.7 per cent compared to October but up 24 per cent compared to November 2012. 

"First-time buyers are firing up the property market and driving its recovery forward," said Richard Sexton, director of e.surv chartered surveyors. "Enticed by lower rates and an array of deals for borrowers with smaller deposits, new buyers have blazed a trail in a lending market which has seen steady year-on-year increases over the past year.

 In particular, lending to borrowers with deposits of 15 per cent or less has risen 60 per cent in the past twelve months. The market is bristling with confidence and first-time buyer activity is so far showing no signs of dimming down.

"On the flipside, first-timers are also the most at risk to suffer from rising house prices. If more houses aren’t built, it is first-time buyers who will inevitably be pushed out of the market, as prices are propelled higher."

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