UK home prices up as London shows resistance, says Hometrack

PUBLISHED : Wednesday, 30 April, 2014, 5:50am
UPDATED : Wednesday, 30 April, 2014, 5:50am

House prices in Britain increased in April for a 15th month as the momentum in the property market spread beyond London, Hometrack said.

Values in England and Wales rose 0.6 per cent, the same pace as in March, the property researcher said. Forty-eight per cent of postcodes recorded an increase, the highest proportion in a decade.

House prices are being driven by record-low Bank of England interest rates, a shortage of property for sale and a strengthening economy. Officials have said they are monitoring the market for signs price increases may jeopardise financial stability.

"The pickup in the coverage of price rises is very clear-cut," said Richard Donnell, director of research at Hometrack. "Improving market sentiment and low mortgage rates are supporting increased activity."

New buyers registering with real-estate agents to browse property rose 3.3 per cent, compared with a 6.6 per cent increase the previous month. The time a property is on the market before it sells dropped to 6.3 weeks, the lowest since June 2007.

Prices rose in all 10 regions covered by Hometrack. Gains were led by a 0.8 per cent increase in London, though there were emerging signs of "price resistance" in the capital.

The time on the market in London rose to 3.4 weeks from 2.7 weeks, while the share of areas reporting price gains fell to 66 per cent from 76 per cent and the proportion of the asking price achieved dropped to 99.3 per cent from 99 per cent, Hometrack said.

"While these changes indicate very strong market conditions, they suggest that buyers are starting to become less willing to bid up the cost of housing at recent rates," Donnell said.