Market News
0.3% rise in house prices: Hometrack
01/03/2010
House prices rose by 0.3% over February according to Hometrack’s latest house price survey.
The survey also reveals below average increases in both the amount of new housing for sale and new buyer registrations. The supply of homes for sale may have grown by 4.6% but the average increase over the same month in previous years has been 14%. Buyer registrations have increased by 8.3% this month compared to an average of 24% in the same month over the last eight years.
Despite the broad evidence of sluggish market activity, price pressures are feeding through more strongly than was the case in the second half of 2009. Average prices are up 0.3% over February and by 0.4% in the last 12 months – the first year on year rise since March 2008. The survey also shows that prices have risen across 25% of postcodes - a level not seen since 2007.
Richard Donnell, Hometrack’s director of research, cautions that price rises alone are not indicative of strong foundations as the 2010 housing market gets off to a slow start.
He added: "A lack of housing for sale is keeping an upward pressure on house prices. This is being re-enforced by sellers and agents. All the recent talk of a housing recovery and positive year on year growth has increased sellers’ expectations of achieving a good price for their property. And agents in an attempt to win instructions and re-build that all important pipeline, are trying to meet those expectations by being competitive on pricing. As a result there are signs that higher priced supply is coming to the market but whether this stock will sell remains to be seen as the growth in sales volumes and demand over the first two months of 2010 is well down on previous years.
"February is traditionally a month when the Hometrack survey registers significant growth in the number of sales agreed - over the last eight years the growth in sales agreed over February has averaged 30%. Yet this year the number of sales agreed has averaged just 10%. A decline in January, together with February’s modest 10% increase, is part of a similar pattern seen in recent housing sales and mortgage lending data."