House prices predicted to rise in 2014
Posted on Wednesday, July 23, 2014
Increased demand coupled with a fall in the supply of new homes was the main cause of a 4.4 per cent rise in house prices in 2013, according to the latest report from property analysts Hometrack, published today.
Demand for residential property grew by 25 per cent in 2013 but the supply of new homes only increased by six per cent, according to the latest survey of UK estate agents.
Richard Donnell director of research at Hometrack said: “Demand grew at the fastest rate for three years while the supply of homes for sale grew at the lowest level recorded over the 12 year history of the survey.
“Scarcity of supply was the result of higher sales volumes eroding the stock of homes for sale. The launch of Help to Buy was a clear sign of Government support for the housing market which encouraged a sustained increase in buyer numbers, especially over the second half of the year.
“Record low mortgage rates also played an important role in higher prices over 2013.”
However, in December, there was the first fall in demand and sales for 11 months.
Hometrack said this was due to the normal seasonal slowdown in activity in the property market in December and average house prices still went up by 0.5 per cent, the fourth consecutive monthly rise.
London and the South East continue to be the regions that are driving up overall prices with annual house price inflation of 9.1 per cent and 5.0 per cent respectively.
The only region to see a fall in house prices was the North of England where prices fell by 0.5 per cent.
However, Yorkshire and Humberside and the North West saw prices rise by significantly less than the national average with increases of just 0.4 per cent and 0.5 per cent.
Mr Donnell said he expected the trend of rising house prices to continue in 2014 but whether this turns into a sustainable national recovery depends on how the overall economy performs.
“Overall we expect the momentum in house price growth to spill over into 2014 supported by a continued lack of supply and rising demand.
“A broader based recovery in the housing market is dependent upon growth in the real economy, jobs and household incomes,” said Mr Donnell.