A U.K. house-price gauge rose in May to a three-year high as government credit-easing programs revived buyer interest across the country, the Royal Institution of Chartered Surveyors said.
A price index increased to 5 from 1 in April, London-based RICS said in an e-mailed report today, citing a monthly poll of property surveyors. A positive number means more respondents saw values increase rather than decline. Measures of new buyer enquiries and newly agreed sales reached levels last seen in 2009.
The improvement largely reflects the Bank of England’s expanded Funding for Lending Scheme, which is designed to ease the flow of credit by lowering bank funding costs. Chancellor of the Exchequer George Osborne’s Help to Buy initiative to help people struggling to raise a deposit is also contributing, RICS said. Mortgage approvals are still about half of what they were before the financial crisis struck the U.K. in 2007.
“There is still a very long way to go until we see a full-scale recovery but green shoots are beginning to sprout,” Peter Bolton King, global residential director at RICS, said in the report.
A measure of new buyer enquiries rose to 30 from 27 and newly agreed sales jumped to 30 from 21, adding to the improved picture of buyer interest, RICS said. A three-month price expectation measure increased to 20 from 12. Respondents expect house prices to rise 1.4 percent over the next 12 months, up from expectations of 1.1 percent last month and 0.1 percent in December.
Respondents in all regions surveyed expect prices to rise over the next 12 month, suggesting the recovery is broadening beyond London. Prices in the capital may rise 4.1 percent in the coming year, compared with an expectation for a 0.2 percent increase in Yorkshire and Humberside in northern England.
The central bank voted last week to maintain its bond-purchase plan at 375 billion pounds ($582 billion) and its key interest rate at a record low of 0.5 percent.