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House prices in England and Wales rise for first time in nine months

Home values in England and Wales rise for first time in 9 months on surge in demand in south

PUBLISHED : Wednesday, 06 March, 2013, 12:00am
UPDATED : Wednesday, 06 March, 2013, 4:40am

UK house prices rose for the first time in nine months in February as demand for homes increased in London and southern England, Hometrack said.

Prices in England and Wales advanced 0.1 per cent from the previous month, the property researcher said.

The number of new buyers registering with agents rose 14.3 per cent on the month, outpacing an 8.7 per cent increase in supply. From a year earlier, values were down 0.1 per cent.

"The impetus for improved market conditions and higher prices has been driven by London and the home counties of southern England, where there is the greatest mismatch between supply and demand," said Hometrack's Richard Donnell.

"We expect demand for housing to continue to grow as we move into spring."

While higher inflation has squeezed households, the Bank of England's Funding-for-Lending Scheme has boosted credit availability, with policymaker Paul Fisher noting that mortgage activity is beginning to revive.

Nationwide Building Society said last week that house prices rose in February and there were reasons for "cautious optimism".

In London, values rose 0.3 per cent last month, Hometrack said. New buyer registrations in the capital rose 18.5 per cent.

But the strength of the economic recovery remains uncertain, with a Markit Economics index showing manufacturing shrank in February as new orders plunged. The same day, the Bank of England said mortgage approvals declined in January.