U.K. Home Sales Rising at Fastest Pace in More Than a Year

  • Turnover improvement could be temporary, RICS economist warns
  • Shortage means no let-up in house price gains in coming months

U.K. housing market activity picked up in September as improving access to mortgage finance fueled demand, according to the Royal Institution of Chartered Surveyors.

A measure of agreed sales rose to 14, the highest since May 2014, from 2 in August, RICS said. Its house price index fell to 44 from 53, back to the same level it was in July. A separate report from Acadata and LSL showed prices rose to 284,742 pounds ($436,500) last month, a ninth consecutive record this year. Home sales saw their strongest September since 2007, they said, driven by activity in the north.

The broader picture is dominated by a lack of property for sale and persistent demand, which continues to fuel price gains. Mortgage lender Halifax said Tuesday that while prices declined in September, strengthening buyer interest means the dip may be temporary. Mortgage lending rose in August by the most since before the financial crisis, according to the Bank of England.

“Activity is now picking up which is encouraging, but unless the stock being sold is replenished there is a limit to how sustainable this modest improvement in market turnover will prove to be,” said Simon Rubinsohn, chief economist at RICS. “Against this backdrop, it is hard not to see prices continuing to move higher over the coming months and into the early part of 2016.”

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