Prices up in buoyant British housing market
British house prices rose by 0.6% during June as the property market remained buoyant, figures showed today.
The cost of a home in England and Wales has increased by 2.9% so far this year, lifting average property prices to £165,500 (€239,635), according to housing website Hometrack.
At the same time, the number of homes sold soared by 8% during the month, more than double the 3.3% rise seen during May.
The average home now takes 6.5 weeks to sell, compared with 7.4 weeks a year ago, while the number of viewings needed before a buyer is found has dropped to 10.9 from 13.2.
Overall, the group said house prices increased across 42% of England and Wales, while they fell in just 2% of the country and remained static in 56% of the areas it looked at.
Richard Donnell, director of research at Hometrack, said: “Media reports of a buoyant housing market over the early part of the year are likely to be providing a support to buyer confidence at a time when the market tends to be slowing.
“However, with high house prices and stretched affordability levels, buyer confidence is fragile. Unemployment levels have been quietly creeping up, and the prospects for the rest of the year hinge on market sentiment, which is primarily driven by expectations for interest rates.
“Whilst there is clear momentum in the market, we believe that a modest cooling in the rate of growth is likely over the second half of the year.”
Hometrack said the property market was continuing to be driven by London, where house prices surged by 1.1% during June, with growth remaining more subdued further away from the capital.
It said the major imbalance between supply and demand in London had caused prices to rise by almost 6% during the first six months of the year, while in the North West, Yorkshire and Humberside, the East Midlands and the North they had edged ahead by less than 1%.
The group said some of the growth in the capital was caused by the fact that the London property market had significantly under-performed compared with the rest of the country between 2001 and mid-2005.
As a result there was now scope for relatively high price rises in the capital, supported by a lack of property on the market and an expanding London economy.
Regions close to London have also performed relatively well during the first half of the year, with prices in East Anglia rising by 2.7%, while in the South East and South West they are 2.6% and 2.3% higher respectively.
