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More supply will keep a lid on house prices

2010 house price rises will be stalled as more homes come onto the market.

A rising number of homes coming onto the market is holding back price rises.

House prices last month were held back by a number of factors, but rebounded from January, said the Royal Institution of Chartered Surveyors (RICS).

Some 31% of RICS members saw house prices rise in February and just 8% reported a fall.

However, house sales remain low with the average surveyor reporting 18 sales in the last 3 months, an average of just 1.4 sales a week. The average RICS member has 63 properties on their books.

RICS reports a bounce in new instructions to sell, at double the level of new buyer enquiries.

Jeremy Leaf, RICS spokesperson, explained the rise in the number of new properties coming onto the market will hold back major house price gains.

“Most market indicators are still positive and consistent with further house price increases,” he said.

“However the magnitude of the gains going forward is likely to continue to ease reflecting the fact that new supply coming onto the market is starting to outstrip fresh demand.”

RICS member John Frost, of Thames Valley estate agents The Frost Partnership, said: “General confidence is still fragile. Death, divorce and debt are still main drivers of new instructions, as aspirational moves are still on hold.