U.K. House-Price Gauge Climbs to Almost Three-Year High

A U.K. house-price gauge rose to the highest in almost three years last month as government measures to support the housing market spurred demand, the Royal Institution of Chartered Surveyors said.

The index rose to 1 from minus 2 in March, the first reading above zero since June 2010, 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. A measure of inquiries from new buyers rose to 25 from 13, the highest since November 2009.

The survey follows a report from mortgage lender Halifax last week that showed U.K. house prices rose to the highest in almost three years in April. Chancellor of the Exchequer George Osborne pledged 3.5 billion pounds ($5.4 billion) of loans plus 130 billion pounds of guarantees in March to help the housing market, adding to a credit-boosting program introduced with the Bank of England last summer.

“It is encouraging to see government initiatives are having an impact,” said Peter Bolton King, RICS Global Residential Director. “Help to Buy in combination with the Funding for Lending Scheme appears to be giving the market a shot in the arm. Thankfully, sales are expected to pick up over the coming months.”

Tighter lending conditions, a squeeze on household incomes and a flagging economy have held back potential home buyers, while a lack of properties for sale helped to prop up values.

Mortgage Advances

Recent data suggests lending conditions may be starting to ease. Loans for house purchases rose 14.8 percent to 42,000 in March from February, the Council of Mortgage Lenders said in e-mailed statement today. Mortgage advances were down 19.2 percent from a year earlier, when demand was boosted by first-time buyers taking advantage of a tax holiday before it expired.

The RICS report signals the housing market may be picking up, with the balance for price expectations over the next 12 months rising to 34 from 26. Results were positive in every part of the U.K., except Northern Ireland, it said. In April, a measure of agreed sales across the U.K. rose to 19 from 11, while the number of new instructions to sell rose to 8.

In London, a measure of new buyer inquiries rose to 31 last month, the highest level in almost two years, from 20 in March. The price balance for the capital rose to 28 from 27.

Still, in the capital, the number of properties put up for sale fell to a balance of minus 36 in April from minus 19 the previous month, the report showed.

In its report, Halifax said house prices rose 1.1 percent in April from March. Hometrack Ltd. said last month that average values increased 0.3 percent in April, the same as in March, which was the largest gain in three years.

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