Hometrack reveals demand is outstripping supply
Hometrack’s Monthly National Housing Survey for February 2006 revealed the rise in property prices was the highest since June 2004, with the average house price standing at £161,700.
Richard Donnell, director of research at Hometrack, confirmed a surge of new buyers in the market had led to high house price inflation, with the number of buyers registering with agents rising by 26 per cent over February. However, he added the biggest cause of high property prices was the shortage of properties on the market. “It is a general shortage of homes for sale that really underpins the growth in average values over the last month,” he said.
The Hometrack February review revealed London property prices rose by 0.9 per cent, with a rise of 35 per cent in the number of new buyers, against a rise of only 10 per cent in the number of homes for sale in the London area. Central London recorded the highest property rises, at 1.6 per cent, while at the other end of the scale, South Yorkshire, North Lincolnshire and the East Riding of Yorkshire all saw property values decrease.
Looking to the future, Donnell conceded that property prices were likely to continue to rise: “A period of improved market activity was always inevitable after the lengthy slowdown between mid 2004 and mid 2005 but the reality is that housing remains fully valued across much of the country. We expect values to keep rising, but the scale of growth over the later parts of the year is set to be far more modest than what we are currently seeing in a supply constrained market,” he added.