LONDON, Sept. 10 (Xinhua) -- The British economy could be set in train for a period of increased growth, backed by rising housing prices which recorded their fastest rise in almost seven years.
The Royal Institute of Chartered Surveyors (RICS) house price survey released on Tuesday revealed increased optimism, with new buyer inquiries jumping to +66 from +54.
The survey also showed surveyors across the country reporting rising prices at +40, up from +37 a month before.
James Knightley, senior UK economist at ING, said: "The strengthening housing market is already having a positive feedback into consumer confidence as households feel wealthier. With credit availability improving and the cost of borrowing falling, this could become a virtuous positive spiral, which is likely to support economic activity more broadly as households become more inclined to spend."
The British economy has struggled to recover from the after-effects of the financial crisis and the subsequent recession, and largely flatlined between 2010 and the first quarter of this year.
The past two quarters have shown encouraging growth, 0.3 percent and 0.7 percent increases respectively, with most economists revising upwards their expectations for growth this year and next.
RICS survey respondents remarked that government measures designed to stimulate the mortgage and housing market such as the Funding for Lending Scheme (FLS) and Help to Buy had helped spark the improvement in house-buying activity.
Blerina Uruci, economist at Barclays Economic Research, said: "Surveyors expect house prices to increase at a faster pace than previously, although this is still consistent with relatively modest growth. House prices are expected to increase by 2.2 percent over the next 12 months and 4.4 percent for each of the next five years."
Uruci added: "These price expectations were 0.6 percent and 3.4 percent, respectively, at the start of 2013. Although the improvement in housing market data is evident, we think that a steady increase in prices is more likely than a property bubble scenario."