This took growth over the first six months of the year to 2.9 per cent. Continuing recent trends, London continues to be the primary driver for growth with average prices in the capital rising by 1.1 per cent over June. Further away from the capital, growth remains more subdued, although prices have picked up moderately in recent months.
Richard Donnell, director of research at Hometrack, said: "Looking back over the first six months of the year there is a stark difference in performance between London and the rest of the country. The major imbalance between supply and demand in London has caused prices to rise by almost 6 per cent whilst growth in four regions has been less than 1 per cent. The differentials in growth reflect the fact that the London housing market significantly under-performed the rest of the market between 2001 and mid-2005. A modest re-alignment of prices over this time meant that there was scope for what have been relatively high price rises, supported by a lack of housing for sale and expanding London economy. Pricing levels across most other regions, where house price growth was high over 2002 – 2005, remain very full and this has been a major constraint on the potential for growth in recent months."
The latest Hometrack survey shows that house prices moved higher across 42 per cent of the country, falling in just 2 per cent of areas and remaining static across 56 per cent of the 2200 postcode areas across England and Wales. The average time taken to sell has decreased to 6.5 weeks compared to 7.4 weeks a year ago. The average number of viewings per sale has also decreased to 10.9 from 13.2 a year ago.
Interestingly the latest survey shows that the number of sales agreed jumped by over 8 per cent in June, up from a 3.3 per cent rise over May. The rise in sales volumes was seen across the country.
Donnell commented: "Media reports of a buoyant housing market over the early part of the year are likely to be providing a support to buyer confidence at a time when the market tends to be slowing.
"The continued growth in prices and rising sales levels suggest continued buyer confidence over the prospects for the market. However, with high house prices and stretched affordability levels buyer confidence is fragile. Unemployment levels have been quietly creeping up, and the prospects for the rest of the year hinge on market sentiment which is primarily driven by expectations for interest rates. Whilst there is clear momentum in the market we believe that a modest cooling in the rate of growth is likely over the second half of the year."
