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Both new buyer enquiries and home sales continued to rise in February, even amidst an increase in the interest rate and general economic uncertainty, shows the latest report from the Royal Institution of Chartered Surveyors (Rics).

A net balance of 17% of respondents said the former metric had gone up – for the sixth month in a row – and a net balance of 9% said sales had grown.

Sales are expected to increase over the next three months too, although the net balance for this metric has fallen from 20% in January to 11% in February.

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And a net balance of 78% survey participants say that house prices had risen on a national level, with this likely to continue over the next three and 12 months.

On the rental side of the market, a net balance of 55% agents saw more demand from tenants in February and a net balance of -21% said that new supply was down. In January, this figure stood at -13%.

A net balance of 66% believe that rent prices will continue to rise, which is the highest reading for this metric since December 2012. Respondents believe that rental growth over the next year will come to .5% and by an average of 5% over the next five years.

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Rics chief economist Simon Rubinsohn says: “Huge clouds of uncertainty hang over the economic prospects as energy prices continue to surge and the Bank of England grapples with how to manage monetary policy in this challenging environment.

“Despite all of this, there is little evidence yet that the mood music regarding the expectations for house prices or rents is shifting. Indeed, the medium-term projections from respondents to the Rics survey are continuing to gain momentum.

“It may well be that these trends ease as the deteriorating macro environment begins to bite but the message that keeps recurring, both for sales and lettings, is there are in aggregate many more prospective purchasers and renters than properties available.

“The risk is that these imbalances exacerbate the cost-of-living crisis and the challenges particularly for those on lower incomes.”

By Gary Adams

Source: Mortgage Finance Gazette

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