House prices boosted by London

According to Hometrack, prices are up by 1.8% over the last 12 months. However, a well above average growth in house prices in London of 0.6% has flattered the headline average price. Prices are up across 19% of the country - 44% of London posted an increase in April.

Commenting on the monthly national housing survey, Richard Donnell Director of Research said: “The April survey of 1,500 agents and surveyors across the country shows further evidence of a housing market on the turn. The supply of homes for sale continues to outstrip demand. This is a trend that has been evident for the last quarter, but lies in stark contrast to the final months of 2009 when buyers far outnumbered the supply of properties for sale.

“The election is being cited as a factor behind growing buyer uncertainty and this is reflected in the number of viewings per sale which has been rising for the last three months from 10.4 in January to 11.2 in April. The growth in the number of sales agreed has also slowed significantly - rising just 6.3% this month compared to 13% in March.

“As the supply of homes for sales continues to outpace demand so the impetus for prices rises is set to wane. The bounce back in market confidence over 2009 was accompanied by a rapid firming in house prices. In April 2009 the proportion of the asking price being achieved was 89%, today this figure may have risen to 94% but it has also begun to plateau. This suggests that agents are finding it increasingly difficult to continue to push pricing whilst maintaining sales volumes. A similar trend is evident in the time to sell which has also leveled - at 8.3 weeks - having improved from an average of over 10 weeks this time last year.

“The changing supply/demand balance together with clear evidence of growing price resistance and caution amongst buyers, suggests that we are set to see less upward pressure on prices in the near term. Despite this the survey found that average prices were up by 0.2% over April - the year on year rate of growth stands at 1.8%, up from 1.3% last month. The monthly increase is down slightly on the 0.3% gains posted in February and March.

“Yet there is a danger of focusing too hard on the headline rate of growth which is being skewed by above average price rises in London. Prices in the capital rose by 0.6% over the month, distinctly flattering the overall headline rate of growth. All other regions posted average or below average growth over April ranging from -0.1% to +0.2%. The near term prospects for the housing market are intrinsically linked to demand which in turn is reliant on strong consumer confidence. The outlook for the economy and jobs market as well as household finances all impact on housing demand and buyer behaviour. With an election well under way, it is not surprising that buyers are currently hesitant in their decision making, the question is whether market sentiment will improve once the result of the election is known.”