Hometrack said the momentum in house price growth over the first half of the year has been driven by a widening imbalance between supply and demand.
The gap stabilised in June with slower growth in demand (up 1.6%). A seasonal slowdown in demand is to be expected as we approach the summer.
Richard Donnell, director of research at Hometrack, said: “The recent momentum in house prices continued into June with house prices growing 0.4% over the month.
“This increase matches May 2013 as the highest rise in prices in a single month since June 2007. An on-going shortage of housing for sale, continued growth in demand and improving market sentiment are combining to push prices higher.”
On a regional basis prices grew across 31% of postcodes in June – this is the highest level since
September 2007.
Prices fell in just 3.1% of postcodes, the lowest level for 3 years (June 2010).
London registered the strongest growth in June with prices rising by 0.9% for the second month in a row.
While market conditions have improved house prices remained unchanged in four out of ten regions.
Donnell said: “There is a clear divide in market performance between London and Southern England and the rest of the country.
“While underlying market conditions have improved across all regions, house prices were unchanged in four out of ten regions in June.
“The upward momentum seen in house prices has been driven by a widening gap between supply and demand.”
Looking ahead Hometrack said it expects prices to increase, though at a slower rate, as we move into the summer months.
