August breaks three year slump
Hometrack said it is evidence of the general improvement in buyer confidence that has been developing over the last few months supported by low mortgage rates and an improving economic backdrop.
Richard Donnell, director of research at Hometrack, said: “The recent momentum in house price growth has been maintained over August with continued growth in demand and sales agreed.”
House prices grew 0.4% in August up slightly on the 0.3% increase recorded in July.
Meanwhile the average time a property has spent on the market has gradually fallen since June from 8.4 weeks to 8.2 weeks in July and 8.1 weeks in August.
Donnell said: “The key market indicators such as time on market and the proportion of the asking price achieved showed underlying housing market conditions are at levels not seen for six years.
“The time to sell at 8.1 weeks is the lowest since November 2007 while the discount to asking price at 5.4% is the lowest since September 2007.”
But the supply of new homes remains constrained showing 0.8% of growth over the month.
Over the last three months much of the growth in supply has been located in the regions outside London and the South East. Pricing levels in the Midlands and Northern regions are tempting more sellers into the market.
The strongest market conditions were recorded in London and the South East where there is the greatest mis-match between supply and demand where prices grew at an above average rate of 0.9% and 0.5% respectively.
Across other regions the overall trend in demand is upwards but supply is also rising and keeping price rises in check. House prices grew across a third of the country in August – the highest coverage of price growth since May 2007.
Donnell said: “Overall we expect demand to continue to expand over the remainder of the year so long as the outlook for the economy and mortgage rates remains unchanged. A lack of housing for sale is set to remain a feature of the market and this will keep an upward pressure on prices in the near term.”