"On the face of it, (the survey) seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at price rises becoming unsustainable in some areas"
- Peter Bolton King, global residential director at RICS
Nothing new about the U.K. property market. It was not a surprise that BoE Governor Mark Carney expected house prices to keep climbing higher until the middle of next year. Home values advanced around 8% last year, posting their biggest annual increase in more than three years, prompting concerns of a developing housing bubble in the real estate sector. British lenders approved the highest number of mortgages seen since January 2008, while this figure still lags almost 25% below levels recorded before the global crisis. However, the latest trends in the economy, which are boosting demand, as well as government schemes, suggest mortgage approvals will continue rising too. The property market receives a strong support from Help to Buy programme, which was extended in October.
Also Thursday the Royal Institution of Chartered Surveyors said a gauge of house-price expectations reached the highest level since 1999, with all regions set to register price increases. The house-price index stood at 56 in December, following 58 in November, while a three-month price-expectations measure jumped to 61 from 59 a month earlier. While these readings are adding to concerns property prices will be out of the government's control soon, Carney assured markets the central bank has necessary tools to control recovering market without having to resort the instrument of raising borrowing costs sharply.
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