House-price rises are easing as optimism fades, say surveyors

THE RUNAWAY housing boom is ending, according to a survey today that shows the number of surveyors reporting rising prices fell for the first time in almost a year.

THE RUNAWAY housing boom is ending, according to a survey today that shows the number of surveyors reporting rising prices fell for the first time in almost a year.

Price rises moderated in every region of England and Wales except the far South-west over the three months to September. It is the first fall since November last year.

The Royal Institution of Chartered Surveyors (Rics) said 63 per cent of its members reported that prices rose with 6 per cent spotting a fall, leaving a net balance of 57 per cent compared with 68 per cent in August.

"While some of the fall back in the pace of price rises can be explained by seasonal factors, there appears to have been an underlying moderation in house-price inflation, especially in London and the South-east," Rics said.

Optimism fell sharpest in the region of Southern England that excludes Greater London, dropping 30 per cent to 61 per cent, while the capital's index fell to 69 per cent. Only a month ago, Rics was saying the whole area below a line from the Severn to the Wash was enjoying a boom.

The easing in inflation was accompanied by a sharp rise in the number of sales, which were 16 per cent higher in September than a year ago.

Rics said it expected house price inflation to ease further over the rest of the year, although prices were forecast to carry on rising.

The Rics index has tracked the sharp rise in house prices recorded by the major lenders, which show inflation running at between 9 and 10 per cent.

The Rics survey may ease worries at the Bank of England, which cited house -rises as a reason for its recent hikes in base rates. The Bank will get another boost from a report today that says pay awards will hold at around 3 per cent into the first half of next year, allaying fears of a pick-up in wage inflation.