Home Sales Reach 3-and-a-half-year peak

Home sales have hit a three-and-a-half-year peak, surveyors have reported, confirming the housing market revival.

Chartered surveyors polled by industry body Rics handled an average of 17.9 sales during the three months to May, the highest figure reported since January 2010. While still low by historical standards, the latest survey adds to the picture of rising activity.

The update came as the Organisation for Economic Co-operation and Development (OECD) confirmed the UK economy remains in growth mode, supporting hopes that a wider recovery is gathering strength.

Surveyors also reported signs that prices were beginning to rise outside London, a market boosted by international buyers. Of those polled, 5pc more surveyors reported price increases rather than decreases in their areas.

The Government’s Funding for Lending scheme, launched to give banks access to cheap finance, has been cited by lenders as a factor pushing down bank funding costs and helping to reduce interest rates for customers, stimulating house sales rates.

Peter Bolton King, a director at Rics, said: “May was an interesting month for the housing market. More people decided to get out there and view property and more transactions went through than in quite some time.

“There is still a very long way to go until we see a full scale recovery but green shoots are beginning to sprout.”

Some fear, however, that government measures to support the housing market – and, by extension, the broader economy – are pricing properties further out of reach for many would-be buyers.

On the wider economy, the latest composite leading indicators (CLIs) from the OECD, which have a good record for predicting changes in growth, showed that the UK economy continued to expand at a little over its “trend” trajectory in April.

Specifically, the think-tank’s UK indicator climbed to 100.8 for the month from 100.7 in both March and February, and 100.6 in the previous two months. A reading of 100 represents trend growth.

The OECD indicators, designed to identify turning points in the economic cycle, showed growth appears to be edging up in most big economies among its 33 member countries.

The report will add to signs that the UK remains safely in recovery mode, after the release of other positive UK data. The number of job vacancies in the City sector rose 20pc to 6,426 between April and May as employers took comfort from more stable financial markets, recruiter Morgan McKinley said yesterday.

Howard Archer, economist at IHS Global Insight, said: “Survey evidence for May for the UK has been markedly firmer, not only overall but across a wide range of sectors of the economy. As a result, we have upgraded our UK GDP forecasts modestly to 1pc from 0.8pc in 2013 and to 1.6pc from 1.4pc in 2014.”

Published by The Telegraph