According to the latest monthly national housing survey from Hometrack house prices have posted their strongest increase since May 2007 with 41 percent of markets registering price rises in September compared to just six percent a year ago.
There is an improved housing market sentiment says Hometrack with rising demand, low mortgage rates and falling supply all combining to place further upward pressure on house prices.
This resulted in house prices rising by 0.5 percent in September, the largest monthly increase since May 2007 and many of the areas outside London that showed price rises had not registered any increase in values for over five years. Over 70 percent of markets in London and the South east are now registering price increases.
The strongest price rises are in regions where supply is most constrained whereas expanding supply is keeping price rises in check in the regions outside London and the South East said Hometrack.
Richard Donnell Director of Research at Hometrack – the residential property analysts – said:
"Housing market conditions continued to strengthen across the country in September 2013. Growing confidence amongst buyers, continued growth in sales volumes and a drop in the number of homes for sale pushed house prices 0.5% higher over the month – this is the strongest monthly increase in house prices since May 2007.
"The impetus for higher growth is coming from a burgeoning recovery across regional housing markets, especially across the South East. Over the last few years the housing market has been split between a buoyant London market, boosted by overseas demand, and a trend of falling prices across other regions on weak domestic demand.
"The survey has highlighted a steady improvement in underlying market conditions outside of London for the last 18 months. Now we are seeing continued house price growth in London combining with modest gains across other regions and creating a picture of a broadening market recovery.
"Price rises were registered across 41% of the country in September, the highest coverage of price rises for 80 months (February 2007). The coverage of house price growth has accelerated in the last nine months across all regions. However, price rises remain limited to less than a third of the market in seven out of ten regions. Figure 1 shows the proportion of each region registering price rises in September 2013 compared to the same time a year ago."