Hometrack believe that the fundamental indicators of a healthy property market are back in place in London with the capital driving the overall rise in house prices.
Its latest monthly survey shows that house prices rose by 0.3 per cent on a monthly basis in April. Price increases have been influenced by a lack of new homes coming onto the market.
Director of research at Hometrack Richard Donnell, commented:
“Improved market sentiment and a lack of supply for sale are key features of the market, providing support to underlying pricing levels across the country. The real driver of price rises in April has been the London market where demand has grown three times faster than supply over the last quarter and key market indicators, such as the time on the market, are now back to levels last seen in 2007."
Key points of the latest research include:
House prices gained 0.3% over April with London continuing to drive the headline rate of growth.
Demand in the capital has grown three times faster than supply over the last quarter and some of the survey’s key indicators for London are now back to levels last seen in 2007.
Outside London, demand rose across all regions for the third month in a row. This follows the same pattern as last year but importantly without the external stimulus of a stamp duty holiday.
A lack of housing for sale is a key feature of the market. For the last three months supply of new housing has failed to keep pace with demand. April saw just a 2.8% increase in new homes coming to the market. This supply/demand imbalance continues to put upward pressure on prices.
The time on the market indicator has fallen by almost a week since the beginning of the year - from 9.9 weeks in January to 9.1 weeks in April.
In London the time on the market is almost half the national rate at 4.6 weeks – a level last seen in October 2007.
The upward pressure on house prices has been limited to areas where the time on the market is above average. Outside London price rises remain below average ranging from a fall of -0.1% in the North East to a rise of 0.2% in Wales. In London average prices grew by 0.7% over April.
In London the proportion of the asking price achieved now stands at over 95% - a level not seen since summer 2007. The ratio is also over 95% in the South East; in all other regions it averages 93%, a level consistent with flat prices.
