First-time Buyers

House prices up 8.5% as supply remains weak

Adam Williams
Written By:
Adam Williams

House prices increased by 8.5% in the year to April as surveyors report growing demand and little increase in supply.

The latest Halifax house price index found the average UK house price had risen to £177,648 in the last year, a rise of 8.5%.

There have been further signs of a growing market with the Royal Institute of Chartered Surveyors reporting the average number of homes per chartered surveyor has hit the highest level since February 2008. During the month the average number of homes sold per surveyor was 23.

Housing supply shrank for the fourth consecutive month and RICS described the property market as “marred by weak supply and high demand”.

Despite the arrival of the Mortgage Market Review at the end of the month, new buyer demand remained high with 20% more chartered surveyors reporting an increase in new enquiries.

Optimism in England outside of London has started to increase with 62% more chartered surveyors in the North West expecting prices over the next three months to rise, the highest level in England.

RICS chief economist Simon Rubinsohn said: “House prices in general look set to remain firmly on the upward trend, although interestingly, there are some tentative signs that the price momentum in the London market may begin to slow in the second half of the year.

“The critical issue for the market remains the lack of second hand supply with our numbers suggesting that the picture is, if anything, getting worse. It is too early to conclude whether this will undermine the positive trend in transactions volumes, but clearly the absence of properties to buy will ultimately be a factor in influencing the ability of people to move homes.”

Oliver Atkinson, director of the estate agents Urban Sales and Lettings, commented: “The quarterly growth figure of 2.3% is a more reasonable portrayal of the market’s current position.

“With the new mortgage rules in play, there may well be a further drop in mortgage approvals and transactions in the months ahead.

“The market needs a breather and a price plateau is surely a positive.

“As always, it’s important to remember that the overall house price picture can be misleading. London and the South East remain supercharged while other areas of the UK, such as the North and Wales, are still struggling.”