The hometrack national October survey of the housing market reports a 0.4% increase in house prices for the second month in a row, confirming a recovery in the housing market after several months of stagnation earlier this year (see graph 1 in notes to editors). Highest rises are mostly in the North and Midlands, the lowest rises mostly being in the South.
Counties with the highest price rises are Hereford and Worcester (+1.6%), East Riding of Yorkshire (+1.4%), South Lincolnshire (+1.3%) and Leicestershire (+1.2%). Only three areas registered price falls: North West London (-0.5%), Buckinghamshire (-0.2%) and Northumberland (-0.1%).
Generally the main house price rises are occurring in the more affordable regions of the country. The 10 regions with the highest house price rises have an average house price of £114,790 whereas the 10 regions with either falling prices or low rises have an average house price of £187,080.
Preston, Hull, Middlesborough, Milton Keynes and Shrewsbury have all seen rises of 2.0% or more over the month, an annualised rate in excess of 25.0%.
Evidence of the continuing revival in the housing market comes from many indicators:
- the number of sales agreed rose 7% over the month, following a 2% rise in September
- sales price as a percentage of asking price has risen for the fourth month in a row to 95.1% (94.7% in the September survey) – buyers are finding it harder to negotiate large discounts
- Hometrack’s unique National Demand Index™ has turned the corner with the number of buyers increasing relative to the number of properties for sale
- average time taken to sell is 5.1 weeks (last month 5.3 weeks) and it is taking an average of 11 viewings to achieve a sale
John Wriglesworth, Hometrack’s Housing Economist “The housing market is heading for new heights. There is no doubt that the year is finishing with new house price highs. Expectations of rising interest rates are having very little adverse effect on housing demand with transactions continuing to increase across the whole country. Provided interest rate rises are modest (less than 1%) the health of the housing market should remain robust.
”We are confident that house prices will continue to rise next year – our new forecast for 2004 being 4%. Speculation of an imminent housing market crash is totally misguided and the doomsters will soon have a lot of egg on their faces!”
