Britain is not a player in the Euro
Overseas buyers are investing in expensive properties, primarily in London, rather than putting their money in more “vulnerable” euro zone areas, they said. A total of 17 per cent more estate agents reported a rise than a fall in house prices last month, up from 9 per cent in March, according to the Royal Institution of Chartered Surveyors.
London led the way with 55 per cent more estate agents reporting a rise, up from 32 per cent. House prices are rising in every region except for Wales and Yorkshire and Humberside, they revealed.
Simon Rubinsohn, chief economist at RICS, said: “Politicians talk about our deficit, but Britain is relatively table compared to the likes of Spain and Greece.
“The Euro block is more vulnerable and because Britain is not a player in the Euro, it is a relatively stable place to invest and overseas buyers are looking at opportunities to invest here.”
Kim Turner, a RICS member based in Kensington, London, said: “Some 80 per cent of our buyers are foreign. They are look for prime residential property that holds its value and are choosing here because it is a relatively stable environment.”
RICs also said new buyer enquiries increased to the highest reading since last December, while the number of properties rose slightly, with estate agents selling 17.4 properties during the last three months or just over one property a week.
However, it remains well below the 23.9 properties being sold every three months by estate agents at the beginning of 2008 and the 32 properties per three months at the beginning of 2004.
In recent weeks, house buyers adopted a wait and see approach in the run up to the General Election, concerned they may face rising interest rates and taxes.
David Pank, a RICS member based in Leeds, said: “Following on from a fantastic March, April has suffered from election blues. And a lack of mortgage finance is still a limiting factor. A challenging market lies ahead.”
Stuart Allan, a RICs member based in Co Durham, said: “The bottom end of the market of older terraced houses is slow mainly due to the difficulties of obtaining mortgages for first-time buyers.”
Separate research also suggested a lack of mortgage finance is still preventing some buyers from entering the market.
While the number of mortgage deals has increased to almost 3,000, up from 1,700 a year ago, more than a quarter of the deals today are restricted to the lender’s existing customers, according to researchers Defaqto.
Kevin Bray, a banking analyst at Defaqto, said: “A typical deal has a rate of between 0.05 per cent and 0.2 per cent cheaper than the lender’s standard mortgage range. In some cases there are reduced fees and others allow you to borrow a greater percentage of the value of the property than their standard range.”