Emerging signs of price resistance in London Market
House prices increased 0.6% in April as regional housing markets picked up momentum in price growth says Hometrack.
London continues to register above average growth (0.8%), which is driven by the lower value markets.
There are signs of growing price resistance on the part of buyers in London, which could check the rate of house price appreciation in the capital over the coming months.
The time taken to sell has increased from 2.7 weeks to 3.4 weeks and there are declines in the proportion of areas registering higher prices compared to the second half of 2013.
Nationally, demand for housing continues to increase, rising by 3.3%.
New supply continues to grow at a slower rate than demand, rising by 1.9% over the month. This is sustaining an extended supply/demand imbalance that has been in place for the last six months.
Market conditions continue to strengthen in the regions outside London. 48% of postcodes registered higher prices in April – three times higher than the level a year ago and the highest for a decade (June 2004).
The time on the market has fallen to its lowest level since June 2007 at 6.3 weeks.
The proportion of the asking price achieved has jumped to 96.7%, which is the highest level since September 2002.
The impetus for house price growth looks set to continue to transition into the regional housing markets over 2014. What is less clear is the scale of pent-up demand that exists to sustain further house price increases continues Hometrack.
The outlook for the economy and interest rates along with the willingness and ability of households to take on mortgage debt are the primary factors that will influence the outlook over the medium term.