Demand in the capital has increased three times faster than supply over the last quarter and some of the survey’s key indicators for London are now back to levels last seen in 2007.
Outside London demand has risen across all regions for the third month in a row. This follows the same pattern as last year but importantly without the external stimulus of a stamp duty holiday.
Richard Donnell, director of research at Hometrack, said: “Improved market sentiment and a lack of supply for sale are key features of the market, providing support to underlying pricing levels across the country.
“The real driver of price rises in April has been the London market where demand has grown three times faster than supply over the last quarter and key market indicators, such as the time on the market, are now back to levels last seen in 2007.
“Demand for housing nationally continues to rise, albeit at a slowing pace with new buyer registrations growing by 3.1% in April, down from 4.6% in March.”
A lack of housing for sale is a key feature of the market. For the last three months supply of new housing has failed to keep pace with demand.
April saw just a 2.8% increase in new homes coming to the market.
Donnell added: “Would-be buyers are often sellers and respondents to the survey report that many potential purchasers are delaying putting their property on the market until they find a home to buy.
“These households are also waiting for signs of a sustained housing market recovery before registering with an agent to sell.
“Together these two factors are boosting demand while keeping supply scarce. Another noticeable change in responses to the survey has been a marked decline in reports of mortgage availability acting as a barrier to market activity - a direct result of the government’s Funding for Lending scheme.”
The survey also found that homes are selling almost a week quicker than they were at the beginning of the year and is down from 9.9 weeks in January to 9.1 weeks in April.
The upward pressure on house prices has been limited to areas where the time on the market is above average.
Outside London price rises remain below average ranging from a fall of -0.1% in the North East to a rise of 0.2% in Wales. In London average prices grew by 0.7% over the month.
Hometrack also revealed that the proportion of the properties now achieving their asking price in London now stands at over 95% - a level not seen since summer 2007.
The ratio is also over 95% in the South East. In all other regions it averages 93% a level consistent with flat prices.
