House prices up 0.5pc in October
The survey shows the gap between supply and demand widened further in October. In the past two months, supply has contracted by 2% and demand has increased by 3%.
The proportion of the asking price being achieved jumped to 95.2% in October. This measure is close to its all-time high of 95.7% last seen in June 2007.
London has the highest rate of growth with prices up 0.8% over the month. Price rises in London are being registered across 75% of the market.
Prices have been steadily rising across the South East while across all other regions prices are rising slowly with the exception of the North where they are static.
The survey shows the time on the market (between a property being put on the market and going under offer) has risen by 0.4 weeks to stand at 8.3 weeks in the past month. This is the first rise for 9 months.
The number of viewings to achieve a sale also increased to 10.2 weeks from 9.8 weeks.
Hometrack believes the talk of a national bubble is over-done but could start to impact on market sentiment and the willingness of buyers to pay higher prices.
The number of markets registering price rises declined slightly in October with 36% of markets registering higher prices compared to 41% in September.
Commenting Richard Donnell, director of research at Hometrack, said: “House prices grew by 0.5% in October driven by a widening gap between supply and demand and above average growth in prices in London and the South East.
“A chronic lack of supply is driving price growth. The supply of homes for sale fell by 1.6% in the month following a 0.3% decline in September.
“Growth in new sales being agreed is running at 4-5% per month and this is continually eroding the stock of homes for sale. In contrast, levels of demand have grown by 3% in the last 2 months. Improving confidence amongst buyers has been fuelled by low mortgage rates and positive news on a recovering housing market.
“The strongest increase in demand over October was seen in London (+6.4%) and this is maintaining the pressure on prices which grew by 0.8% over the month, the same as September and down slightly on August (0.9%).
“Price rises have been accelerating across the South East where they increased by 0.7%, up from 0.6% in September. Across all other regions prices grew at a below average rate, with the exception of the North where prices remain static.
“The net result of the growing scarcity has been achieved prices getting closer to asking prices – the proportion of the asking price being achieved has jumped to 95.2%, close to its all-time high of 95.7% (June 2007). The proportion has grown across all regions in recent months as buyers have been willing to pay a larger proportion of the asking price to secure a sale.”
Charles Haresnape, managing director of residential mortgages at Aldermore Bank, said: “House prices outside London appear to be either static or rising slowly. While month-to-month data fluctuates the overall year-on-year trend remains acceptable and beneficial to the wider economy.
“It is interesting to note that while talk of a housing bubble is exaggerated the fact that this debate is going on may be enough to dampen buyers’ willingness to pay higher prices.”