According to the firm, the five major UK house price indices show an average of 11.1 per cent annualised growth for the twelve months prior to April 2007. This shows a 0.7 per cent increase in the rate of growth from the previous month (10.4 per cent) and a 5.7 per cent increase since April 2006 (5.4 per cent).
Strong annual growth…
The April figures demonstrate a further upturn in the growth rate of UK house prices, largely attributed to the results from the Rightmove Index. The outlook from Rightmove remains the most bullish of all the indices with their annual and monthly data on asking prices showing new highs. An ongoing optimism from sellers has led to the significant increase on last month’s figures, as aggressive property pricing continues. House prices remain strong with annual growth stable at around the 10 per cent mark.
Supply and demand has a greater influence than interest rates…
With the latest interest rate increase to 5.5 per cent and suggestions of a further rise later in the year, the continued pressure from the Bank of England will eventually take its toll on homeowners and buy-to-let investors. However, current rates are unlikely to have a major impact on prices, with the continued imbalance between supply and demand remaining the overriding factor in driving the market forward.
Average UK house price rises…
The average house price in April 2007, taken from the average price provided by all five major indices is £208,174, up from £204,828 in March. This shows an increase of £3,346 in the value of the average property in the last month and an increase of £20,498 in the twelve months from April 2006, when the average price of a home was £187,676.
Stuart Law, managing director of Assetz, commented: “The continuing upward trend in UK house prices has been strongly demonstrated again this month, with the indices showing the annual increase in the price of a home to have broken the £20,000 barrier in April. The increased rate of growth to 11.1 per cent can be attributed to the current high levels of confidence amongst sellers, reflected in asking prices, but I expect this to fall back in line with our standing forecast of 7-10 per cent growth by the end of the year.
“With homeowners receiving a further blow this month from rising interest rates, they can be assured that it is the ongoing demand for housing stock that is pushing prices upwards in the UK, and not Bank of England targets. The continued imbalance between supply and demand has been the driving force behind such positive growth in the UK, and there is little to suggest that this will be corrected any time in the near future.”
