Price increases in England and Wales reported
Residential property prices in England and Wales rose by an annual 1.8% in April, their fastest pace of increase since January 2008, according to figures published today. (Monday April 26)
But monthly property price growth slowed to 0.2% in April from 0.3% in March on a non-seasonally adjusted basis, according to the latest Hometrack price index.
The monthly rise was driven by a 0.6% increase in London, whereas prices in other regions were more typically flat or up by just 0.1%. Yorkshire and Humberside in northern England recorded a 0.1% price fall.
The Hometrack index also shows that the supply of property coming on to the market rose by 3.7%, outstripping a 1.0% increase in new buyers registering with agents.
‘Fewer bargain properties on the market when set against a backdrop of sluggish economic growth and rising unemployment levels, have led to increased caution among buyers,’ said Hometrack’s director of research, Richard Donnell.
He added that next month’s general election was also causing buyers to wait. ‘The bounce in market confidence over 2009 was all about pent-up demand feeding back into an undersupplied market. However, the fundamental issues which have plagued the economy for some time still remain,’ he explained.
Mortgage lenders Halifax and Nationwide have reported that property prices have risen almost 10% from a low around a year ago, but access to finance is still hard for many buyers after the credit crunch.
The average UK property price is now £168,521, some 9.1% per cent higher than the low point hit in April last year, according to the figures from the Halifax. The figure is 5.2% above March last year.
‘Spring has finally arrived and brought with it a much-needed boost to the housing market, particularly among sellers. It reflects growing confidence that the recovering is well under way,’ said Gary Smith, president of the National Association of Estate Agents.
The figures are broadly in line with data from rival mortgage lender Nationwide last week, which showed house prices rose 0.7% in March.
House prices have been rising since around mid-2009, mainly because of a scarcity of properties for sale, but Halifax said an increase in the number of homes on the market was starting to reduce that imbalance.
‘There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand. This should help to contain the upward pressure on house prices,’ said Martin Ellis, Halifax’s housing economist.
However, many analysts believe house prices will come under pressure this year because credit conditions remain tight, although the government’s two year increase in the threshold for property tax for first time buyers to £25,000 should help.
According to the latest figures from HM Revenue & Customs there was a 22% increase of property sales to first time buyers in March compared with February.