House price rise defies rate hike

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Houses prices are rising at their fastest pace since May 2004 despite August's rate rise, a survey suggests.

The Royal Institution of Chartered Surveyors (RICS) said 35% more of its members said prices rose rather then fell in August.

House prices are now rising in all parts of the UK, led by Scotland, the north of England and London.

RICS' findings mirror those of other housing market surveys, all of which suggest prices are rising sharply.

Buyers encouraged

On Monday, the Department for Communities and Local Government (DCLG) said prices rose by 6.0% in the year to July, up from 5.2% in the year to June.

The average UK property now costs Â£194,454, the DCLG added.

Likewise, the Halifax and Nationwide have both said house prices are rising at a far faster rate than they had expected.

RICS cited "above trend economic growth and a firm labour market" for encouraging new buyers to take the property plunge.

This is despite the Bank of England's decision to increase the rate of borrowing by a quarter point to 4.75% last month.

RICS members said that this had had little impact on the market and that buyer enquiries had risen for the fifteenth month in a row.