Rising demand and more agreed sales means the recent momentum in house price growth has been maintained in August, normally a month which sees a downturn.
According to Hometrack’s monthly national housing survey, house prices rose by 0.4% last month, following a 0.3% increase in July.
Demand continued to grow in August, up 1.1% on the back of improving market sentiment. This flies in the face of tradition; over each of the past three years demand has fallen during the month of August.
Hometrack said that, far from the traditional downturn over the summer holidays, there was improvement across all key indicators – such as time on market and the proportion of the asking price – confirming a widely-reported recovery in the housing sector.
Hometrack reported that house prices grew by 1.8% over the past twelve months – the biggest year-on-year rise for more than three years.
Richard Donnell director of research at Hometrack, said: “The recent momentum in house price growth has been maintained over August with continued growth in demand and sales agreed. House prices grew 0.4% in August, up slightly on the 0.3% increase recorded in July. All the key market indicators such as time on market and the proportion of the asking price achieved show underlying housing market conditions are at levels not seen for six years. The time to sell at 8.1 weeks is the lowest since November 2007 while the discount to asking price at 5.4% is the lowest since September 2007.
“The strongest market conditions are in London and the South East on the back of an imbalance between supply and demand. Across the rest of the market house prices are increasing more slowly as supply keeps pace with rising demand. In three regions, however, prices remain broadly static and in the North East prices drifted lower by 0.1% in August.
“Overall house prices grew across a third of the country in August – the greatest coverage of price rises since May 2007. London and the South East accounted for two thirds of the areas registering price rises.
“Overall we expect demand to continue to expand over the remainder of the year so long as the outlook for the economy and mortgage rates remains unchanged. A lack of housing for sale is set to remain a feature of the market and this will keep an upward pressure on prices in the near term.”
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