British house prices rose at their fastest pace in more than two years in the three months to June, propelled mainly by sharp gains in London and south-east England, a closely-watched survey showed today.
The Royal Institution of Chartered Surveyors said its house prices balance jumped to +28 from +21 in the prior period, the highest reading since May 2004 when the balance reached +41 at a time of double-digit property price inflation, which sparked concern at the Bank of England.
However, the increases are sporadic - the RICS said the gap between London price rises and those in the rest of the UK was the largest ever recorded in its survey, which began in 1978.
London property prices rose at their fastest pace in 6.5 years and the fastest in 4 years in south-east England.
The figures will cast doubt on the perception that a mini housing boom started earlier this year is petering out. "Economic divisions used to be characterised by unemployment and economic decline but are now characterised by the difference in house prices.
London has become a property kingdom created by finance," said RICS' Ian Perry in a statement.
The sales-to-stock ratio, which many economists watch as a better gauge of the housing market's health than the house prices balance, rose to 36 per cent from 35.7 per cent in May, its highest in 22 months.
A stalling in new instructions for sale along with a rising number of buyers has cut into the amount of homes available. "Given a combination of rising buyer enquiries and a drop in available property on the market, it is not surprising that surveyor confidence has jumped again," said the report.
Surveyors' optimism for future house price rises was its brightest since March 2004, also around the height of a property market frenzy that saw the average price of a home in the UK more than double since the 1990s.
Other surveys of the property market are telling the same story about a gap between rising prices in the capital and the south east and relatively subdued activity elsewhere in the UK.
The Nationwide building society said price rises were subdued in June and said house price inflation was on a slowing trend. The Halifax, the nation's largest mortgage lender, said prices fell 1.2 per cent in June.