Rics' latest monthly survey found that 44 per cent of surveyors recorded rising house prices last month, up from 41 per cent who reported an increase in June, and the largest differential for a year.

It also found that the average number of properties listed with each member had fallen to 47, with new listings down in nine out of twelve regions, while demand has risen for four consecutive months and shows no signs of abating. This could create conditions for even faster price rises over the next year.

The Guardian says the surveyors across the UK "agreed the lack of properties for sale was causing a vicious cycle, as the limited choice on offer is deterring would-be movers and therefore further restricting new instructions". It said prices were expected to surge in particular in East Anglia and Northern Ireland.

House prices across the UK have hit record levels in recent months amid widespread reports of a shortage of supply, with demand being propped up by rock bottom mortgage rates .

There is, however, a growing sense that mortgage rates could be about to turn ahead of an expected interest rate rise, while increasing prices have been cited as a reason for a decline in the number of transactions. Despite the supply issues, this could yet begin to act as a drag on price rises in the medium term.

_______________________________________________________

House prices 2015: UK affordability improves but rate rise looms

Lending for house purchase bounced back in June after a sluggish start to 2015, according to latest figures from the Council for Mortgage Lenders (CML).

The data show an increase in particular to first-time buyers, with the number of loans up 22 per cent in June according to trade website FTAdviser. The value of loans was also higher than in May at £4.2bn, bringing to an end a slump in new buyer issuance that began with a 27 per cent decline in January and has persisted through the first half of the year, The Guardian notes.

CML said the figures were the result of improved affordability due to cheaper mortgage rates. First-time buyers were putting the "smallest proportion of their income towards their mortgage payments since its records began in 2005", down to 17.9 per cent in June. This correlates with figures published by the Daily Telegraph earlier this month.

But the Financial Times notes lending to first-timers is still down on last year, reflecting a reality that high house prices and corollary higher deposit demands are still proving prohibitive for many. With a potential rise in interest rates in the near future and mortgage rates already on the turn at many high street lenders, the affordability improvement might dissipate soon.

Fears over an impending move by rate-setters is already driving a huge surge in remortgage activity, the BBC says, pointing to a 30 per cent increase in June and the highest volume of borrowing by existing owners since September 2013. During June 31,600 households changed their mortgage deals, compared with 24,300 in May.

A boom in buy-to-let borrowing by private landlords also continued, despite moves by the chancellor at the Budget to restrict the tax breaks offered, for example, on mortgage interest.

www.theweek.co.uk/