This follows last month’s 0.9% rise, the strongest recorded increase since October 2002. This year’s monthly rises have been significantly above typical month changes recorded last year (see graph 1 in notes to editors). As a result of the strong rises seen so far this year and also ongoing pent-up demand in the market (see below), Hometrack has upgraded its house price forecast to 8% (previously 4%).
Strong price rises were spread across the whole country. All 52 county areas reported price rises, the highest increases being in the North: Teeside (1.5%), Northumberland (1.2%), Tyne and Wear (1.2%), Cumbria (1.1%) and North Yorkshire (1.1%). London – North also recorded a rise of 1.1%. Oxfordshire was the slowest moving county, with a rise of only 0.1% (see table 4 in notes to editors).
Among the country’s major cities, Bath compounded its status as fastest moving city for the second month running with increases of 2.4% (2.2% in the February survey). Other cities with high price rises included Middlesborough (2.1%), Cardiff (1.7%), Milton Keynes (1.7%) and Taunton (1.6%). No city experienced falling values this month although Cambridge, Winchester and Hull remained static with no recorded rises.
The overall average price of a house has now increased to £149,800 (last month £148,500).
Hometrack’s unique National Demand Index™ shows both the number of properties for sale and the number of buyers registered has increased. However, the number of new buyers registered has increased by 6.5% while the number of properties listed has risen by 4.2%, implying demand outweighing supply. This pent-up demand suggests further strong house price rises in coming months.
Average sales price achieved as a percentage of asking price continued to rise to 96.2%. This is over 2% up from the low of 94.2% recorded in last year’s June survey. This is the highest percentage recorded since November 2002, and again provides evidence that demand is strengthening in relation to supply.
The average length of time taken to sell a property has fallen to 4.3 weeks (4.6 weeks in February’s survey). There is currently an average of 10.4 viewings before a sale is achieved.
John Wriglesworth, Hometrack’s Housing Economist, comments: “The housing market this month has strengthened, with strong house price rises across the whole country. Demand by new buyers is outweighing supply and the upward pressure on house prices continues. Low interest rates remain, and despite prospects of rises this year, buyers are not being deterred from borrowing even higher multiples of their income to afford their desired homes.
“Income growth and employment prospects remain strong, particularly so in London where City jobs and bonuses are on the increase. The current market is very much a sellers’ market, with buyers having to accept very close to asking prices.
“Due to all these factors, we have raised our house price inflation forecast for 2004 to 8%, previously 4%. Doom mongering headline grabbing economists predicting an imminent housing market crash will soon have to raise their own forecasts, or face the consequences of looking incredibly foolish!”
