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UK property market strengthens

27th March 2006 | back to article listings BACK    print this article PRINT

Investors in the UK property market have been boosted again today, with news that house prices increased by 0.5 per cent in March.

According to the latest research from Hometrack, this is now the fourth month in succession that house prices have increased, while it is also the highest monthly rise since the buoyant summer of 2004.

Predictions of a market crash back in autumn now seem utterly incongruous, as confidence has returned at an incredible rate, pushing up house prices across the country. With recent surveys also pointing to higher confidence among first-time buyers, the market is certainly in good health and experts are expecting the trend to continue.

March also saw the first annual rise since January 2005 and although 0.1 per cent may seem negligible, it provides further evidence that the market is moving in the right direction.

Property investment within the UK has remained a lucrative business and the new data has only injected further confidence ahead of the typically active summer months.

According to Hometrack, London is again leading the way, although the national average house price is now up to £162,500.

While several initiatives are now underway to increase the supply of housing in the UK, the new research has found that demand is still much higher than supply. For those looking to sell properties, the conditions are ideal, with house prices boosted in all areas.

In March, there was a seven per cent rise in the number of buyers, while only a 3.7 per cent increase in the number of new properties available and so it is inevitable that sellers are currently making impressive returns on their investments.

The situation was even more pronounced in London, where demand grew by ten per cent and the number of properties available only edged up by one per cent.

Surprisingly, perhaps, this has only translated to a modest improvement in the proportion of the asking price that sellers are receiving. At 94.3 per cent, it is certainly nothing to complain about, although having only climbed marginally from 94.2 per cent, some may have been expecting a little more.

Nonetheless, properties are selling more quickly than they were last month and the number of viewings per sale has also fallen, reflecting buyer confidence and a general eagerness to complete the transaction.

Meanwhile, mortgage approvals are also on the up, with the British Bankers' Association finding that the figure increased by 22 per cent in February when compared to the same month in 2005.

At 57,585 in the month, the number was significantly up on the 45,039 in January and 47,084 in the previous year. The rise was slightly slower than in previous months, however, and analysts are suggesting it may indicate that the market will level out a little, after several months of impressive growth.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/2585.html. Alternatively, please see our full press release archive.

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