House prices rose at the fastest pace in more than four years in October with the lack of available housing continuing to drive the trend upwards, according to a new report today.

The Royal Institution of Chartered Surveyors (RICS) said 48.1% more of its members reported a rise in prices than a fall during the month, up from 45.7% in August.
The figure is more than double the long run average of 21%, RICS said.

According to the survey of members, London and the South East continued to lead the charge, with house prices in the capital accelerating at the fastest pace since June 1999.

But house price momentum was also in evidence in the East and West Midlands, according to RICS' estate agents.

New buyer enquiries rebounded following last month's slowdown in an indication that they had shrugged off fears over interest rate hike.

In addition, completed sales also rose in the quarter to October and are currently riding at 19% higher than the same period last year.

Confidence in sales amongst RICS members fell slightly but the expected interest rate rise in November did little to dampen optimism over price outlook which rose to the highest level since March 2004.

Ian Perry, spokesman for the Royal Institution of Chartered Surveyors, said: 'Even after last week's interest rate rise, surveyors are still confident that the housing market will remain buoyant.

'It is too early to discount a further interest rate rise early next year.

'An assessment needs to be made of the impact of higher interest rates on spending in the high street over the key Christmas period and the pulse of the business sector.'

He added: 'London continues to see city bonuses inflate the housing market beyond the accessibility levels of most first-time buyers, and the rest of the nation is showing early signs of building up momentum as prices pick up in the laggard markets of the midlands and northern England.

'But the market is unlikely to feel cold winds from high finance costs until mid year at the earliest as economic conditions are favourable.'

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