Rics warning over "unsustainable" house price rises

Property price rises could become "unsustainable" in some areas unless more homes become available, according to the Royal Institution of Chartered Surveyors (RICS)

A rise in the number of houses coming onto the market is not enough to meet demand, its latest market survey found.

Last month, 44% more surveyors reported increases rather than decreases in new instructions, the highest in the UK.

Demand grew, with 55% more surveyors reporting a rise in new enquiries.

As a result, prices continued to rise across Scotland, the RICS residential market survey for December found.

'Affordable mortgages'

Scotland director Sarah Speirs said: "Although the number of houses on the market falls short of demand, the increase reported is certainly a step in the right direction.

"Growing availability of affordable mortgages has released some pent-up demand from a market that, in recent years, has seen many viable buyers unable to enter the market.

"On the face of it, this 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."

Growth in demand for rented accommodation has begun to slow "significantly" as more renters opt to enter the market and more sales are finalised, the survey found.

Expectations for the year are upbeat, with surveyors predicting sales and price numbers will increase due to easing credit conditions and the imbalance between supply and demand.

Responding to the survey, Kevin MacDonald, of chartered surveyors Graham and Sibbald in Inverness, said: "The market in 2013 ended on a promising note in the lead-up to Christmas.

"Early signs are that 2014 has begun in a similar vein with activity from buyers enticing sellers to bring new properties to the market."