04 Mar House price divide widens

The house price divide between the south-east and the rest of England and Wales widened last month with a seasonal upturn in sales in London and slight decreases in parts of the north, according to the monthly national housing survey by the property analysts Hometrack.

Across England and Wales 14.8% of postcodes registered price rises, of which 74% were in London and the south-east. Almost half of London postcodes (48%) registered an increase in values of 0.3% on average, with Southwark, Ealing, Merton and Bexley all achieving an above-average house price increase.

Regions with an average overall decrease included the north-east of England (-0.2%), north-west, and Yorkshire and Humberside (-0.1%).

Prices grew by 0.1%, overall, the first time values have risen for nine months since May 2012.

The number of new buyers registering with estate agents last month rose by 14% – which is consistent with previous years. The number of new properties coming on to the market rose by 8.7%.

The strongest price growth was in areas with lack of supply and growing demand. Hometrack said it expected both demand and supply to grow. However, higher stamp duty costs in southern England would be a disincentive to sell, creating scarcity and supporting headline prices, they said.

Property across London was the quickest to sell; the average time being 5.2 weeks, compared with 9.7 weeks overall. The east Midlands was the slowest, at 13.6 weeks.

Sellers in the south-east were able to obtain, on average, 94.9% of their asking price, compared with 93.4% overall, and just 91.9% in Wales.

Richard Donnell, Hometrack’s director of research, said: “The latest survey shows that a seasonal upturn in housing market activity kicked in over February with more sales agreed, a bounce in demand and an increase in the supply of home for sale.

“The impetus for improved market conditions and higher prices has been driven by London and the home counties of southern England where there is the greatest mismatch between supply and demand.”

Donnell added it was unclear if the weather or “a more fundamental weakness in demand for housing” was behind a growth of less than 5% of new buyer registration in the north-east, and Yorkshire and Humberside.

Speaking of the shortage of new housing stock for sale, he said one London-based respondent said that housing supply in the capital was at its lowest for five years.

“This tallies with our survey which shows that low turnover has been a feature of the market for the last five years. While the market in southern England is the most buoyant, it is also the most expensive.”

He added: “Low turnover is creating scarcity and this, combined with rising demand, means prices in those areas where there is the greatest mismatch between buyers and sellers are being put under upward pressure.”