Property prices soar by 9.1% since start of year in England and Wales

Average asking prices for property in England and Wales have increased by 2.1% in the last month, the fifth monthly price rise in a row, the latest index shows. It means that prices have now risen by 9.1% since the start of the year, the strongest start to a year since 2004, according to Rightmove.

The figures also show that the south of England has hit all time highs with prices surging in London, the South East and East Anglia. Indeed, average asking prices in London have gone past £500,000 for the first time. Property in London is now twice as expensive as the national average and increased by 3.1% in May compared with April.

‘The tumbling of records is being driven by the equity rich generation with a definite southern bias, though agents in most parts of the country are reporting strong demand for well priced and decent quality stock,’ said Miles Shipside, Rightmove director and housing market analyst.

‘The recession appears to have precipitated a change in buyer behaviour which has left them more choosy and less willing to settle for second best. Not only are they looking for value and wary of paying over the odds, prospective buyers are also giving thought to ease of resale, a sign that the pain of this financial crisis has left them more mindful of the liquidity of their assets,’ he explained.

Quote from PropertyCommunity.com : “London saw average advertised residential property rents increase for the first time in four months, up by 0.26% between week two and week four in April, new data shows.”

Shipside said that the availability of cheap money is key to driving positive sentiment and, with 84% of respondents to Rightmove’s latest Consumer Confidence Survey stating that they felt prices would be the same or higher in 12 months’ time, this seems to be feeding through to home movers. ‘However, the pent up demand is still being frustrated by the restricted supply of fresh property. Rightmove has recorded 3% fewer properties coming to market when comparing the first five months of 2013 to those of 2012. This helped exert the upwards price pressure resulting in this month’s new record asking price,’ he added.

Meanwhile, another new index shows that the average price of a new home in the UK increased by 1.9% in April compared with the previous month to reach £236,122. The index from SmartNewHomes also shows prices are up 4.1% on an annual basis and have increased across most of the country. The biggest monthly increase was in Greater London, up 6.8% and outside the capital city Yorkshire and Humberside saw the highest monthly price growth of 4.4%.

However, East Anglia suffered its first price drop of the year, falling back to £213,789, its lowest price since April 2012. All regions in the UK except Scotland witnessed positive annual price growth with the South West and North West seeing price rises of 9% and 6.6% respectively. ‘It has been a very positive spring for developers. The launch of the Help to Buy scheme has boosted confidence in the new homes market, reflected in positive monthly, quarterly and annual price growth,’ said Steven Lees, director of SmartNewHomes.

‘The scarcity of supply remains the thorn in the side of the housing industry. Despite recent planning reform, we are yet to see any notable impact on supply and the number of homes being built remains as low as ever,’ he explained. ‘The Help to Buy scheme has the potential to have a huge positive effect on our society by helping thousands more buyers into home ownership, but without an increase in supply there is a real risk that the scheme will ultimately only push prices even further out of reach,’ he added.