This article by Property Wire on October 17th, 2013 tells us that UK's residential property asking prices continue to rise according to the latest sector index.
Residential property asking prices in the UK are continuing to rise, up
another 2% on last month and now 12% higher than a year ago, according
to the latest sector index.
The prices in England and Wales are now up 5.5% on last year and the
North East, North West and Scotland were the only parts of the UK not to
record price rises in the last month.
The Asking Price Index from
Home.co.uk also shows that the supply of property for sale across
England and Wales is down 18% on last year.
On a monthly basis prices in England and Wales have risen 1%, the
largest monthly rise since May 2011. London and the South East still
continue to show strong growth and more areas of the UK are contributing
to the recovery.
Scotland is now the only area of the UK that is still recording house price deflation, down 1.4% over the last 12 months.
The
index report says that the imbalance between demand and supply
continues to dominate the market dynamic. The supply of fresh property
stock across England and Wales has contracted by a further 18%, and in
London new stock is down by 31% compared to last year.
Growing
demand from buyers chasing ever fewer properties has driven down the
typical time on market by an average of 8% over the last 12 months.
However,
the recent price rises being recorded across the majority of the UK
still conceal the bipolar nature of the market. Over the last five
years, prices across England and Wales have risen 3.4%, whereas four out
of nine English regions, plus Scotland and Wales, have shown price
falls over the same time period.
Annual price growth is largely
driven by London with a rise of 11.7% with prices in the South East
up7%. The South West is vying to become another high performance region,
with price rises of 4.6% over the last 12 months. Annual house price
rises of 4% in the East Midlands and 3.5% in the West Midlands means
that capital invested in those regions is now keeping up with inflation.
A
growing concern is that regional house price bubbles are beginning to
emerge where demand for housing continues to far outstrip supply. A lack
of attractive non-property investment opportunities coupled with the
widely reported surge in home prices is making potential vendors hold
back, the report suggests.
As a consequence, the flow of new
property stock across England and Wales is down 18% on this time last
year. Three of the nine English regions are recording even tighter
supply figures. Sales stock entering the market is now down 21% in the
East and South East, and may well approach the 31% drop seen in Greater
London. The flow of new supply in Wales and Yorkshire is relatively
strong, with only a 5% fall in stock. Subsequently, average prices in
these regions are being kept in check, with rises of 1.5% and 0.6%
respectively over the last 12 months.
According to Doug
Shephard, the firm’s director, London's property investment bubble
continues to expand at an alarming rate. He describes the 2% jump in
average prices in the last month alone as ‘simply astonishing’, and
pointed out that the increasingly severe shortage of new stock is
fuelling the accelerating rate of growth.
The average price of a house in London has broken through the
£400,000 barrier for the first time and is 15.3% higher than five years
ago. The growth is not showing any signs of slowing down and even the
South East, with annual price growth of 7%, doesn't come close the
capital's performance. Currently, only 60% of the properties for sale
within a 10 mile radius of the centre of London are priced below the
Help to Buy scheme threshold of £600,000.
‘House price growth is
now sweeping north and west from the capital. Welcome news for home
owners, but troubling for potential buyers whose salaries are not
increasing anywhere near as fast,’ said Shephard.
‘Price rises in
London and its surrounding regions have now established a solid two year
trend, and one may well conclude that these property markets have fully
recovered.
However, a true recovery cannot be complete without
considerable improvement in the underlying economy, which is currently
looking like a one horse race. Until real wage growth matches house
price inflation, housing affordability will become increasingly
difficult and a distant dream for many,’ he explained.
‘The
ongoing availability of government backed cheap lending is already
encouraging overall price rises over and above inflation. A key concern
is that the impending Help to Buy scheme will only exacerbate
affordability problems. Further market stimulus may be justified in
selected areas such as the North, but certainly not across the whole UK,
as that would significantly raise the risk of another property crash,’
he added.
Article Source: http://www.propertywire.com/news/europe/uk-property-asking-prices-201310178359.html
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