The UK housing market activity did not follow the usual August downturn over the summer holidays reports Hometrack, instead the market continued to show growth.
Demand continues to grow showing an increase of 1.1% in August. This coupled with a more modest increase in supply of just 0.8% should maintain upward pressure on prices.
The growth in supply has been mainly outside of London and the South East says Hometrack and the firmer pricing in the Midlands and Northern regions is encouraging more sellers onto the market. But the rising numbers of potential buyers is keeping prices in check.
The rise in average house prices of 0.4% in August follows on from the 0.4% seen in May and the 0.3% seen in July.
But the strongest market is still in London and the South east where the mismatch between supply and demand remains at its greatest. In London average house prices grew at 0.9% in August and in in the South East it was 0.5%.
According to Hometrack house prices grew across a third of the country in August, which is the highest coverage of price growth since May 2007. And the net supply to demand balance should see house prices rising in the coming months.
Richard Donnell Director of Research at Hometrack said:
“The recent momentum in house price growth has been maintained over August with continued growth in demand and sales agreed. House prices grew 0.4% in August, up slightly on the 0.3% increase recorded in July. All the key market indicators such as time on market and the proportion of the asking price achieved show underlying housing market conditions are at levels not seen for 6 years. The time to sell at 8.1 weeks is the lowest since November 2007 while the discount to asking price at 5.4% is the lowest since September 2007."
"Overall we expect demand to continue to expand over the remainder of the year so long as the outlook for the economy and mortgage rates remains unchanged. A lack of housing for sale is set to remain a feature of the market and this will keep an upward pressure on prices in the near term."