Monday, 25 March 2013

House Prices in Biggest Jump for Three Years, says Hometrack

House prices are being kept up by lack of stock – but affordability appears to be driving new buyers away.

The latest Hometrack report, out this morning, says house prices rose by 0.3% this month, but stock volumes and the level of sales agreed were down. Also down was the rate of rise in new applicant numbers.

The house price rise was the highest monthly growth for three years, says Hometrack.

London house prices rose the most (0.7%) this month. But prices were down in just one region, the North-East.

In London, prices rose in 60% of postcodes. Across the rest of England and Wales, there have been price rises in one fifth of postcodes.

Supply continues to be a headache for many agents. It has grown by 13% over the last two months, but by just 3.5% over the last six. Demand has risen by 19% in the last two months, but the rate of increase fell this month, and is lower than this time last year.

Time on the market stands at just 4.9 weeks in London, the lowest since October 2007. That compares with 11.8 weeks in the Midlands and North.

Richard Donnell, Hometrack’s housing analyst, says market sentiment is improving, and said it should continue to do so thanks to Budget initiatives and Funding for Lending.

However, he cautioned: “While scarcity of homes, and support for lending and new housing, will act as a support to pricing levels, the problems of affordability and deposit levels still remain serious impediments to a full-blown housing market recovery.”