30 June 06House prices up 2.9% over first half of 2006 and still rising
House prices grew by 0.6% over June, taking growth over the first six months of the year to 2.9% according to the latest monthly survey from Hometrack, the housing information business. Continuing recent trends, London continues to be the primary driver for growth with average prices in the capital rising by 1.1% over June. Further away from the capital, growth remains more subdued, although prices have picked up moderately in recent months.
"Looking back over the first 6 months of the year there is a stark difference in performance between London and the rest of the country" comments Richard Donnell, Director of Research at Hometrack. "The major imbalance between supply and demand in London has caused prices to rise by almost 6% whilst growth in 4 regions has been less than 1%. The differentials in growth reflect the fact that the London housing market significantly under-performed the rest of the market between 2001 and mid 2005. A modest re-alignment of prices over this time meant that there was scope for what have been relatively high price rises, supported by a lack of housing for sale and expanding London economy. Pricing levels across most other regions, where house price growth was high over 2002 - 2005, remain very full and this has been a major constraint on the potential for growth in recent months."
The latest Hometrack survey shows that house prices moved higher across 42% of the country, falling in just 2% of areas and remaining static across 56% of the 2200 postcode areas across England and Wales. The average time taken to sell has decreased to 6.5 weeks compared to 7.4 weeks a year ago. The average number of viewings per sale has also decreased to 10.9 from 13.2 a year ago.
Interestingly the latest survey shows that the number of sales agreed jumped by over 8% in June, up from a 3.3% rise over May. The rise in sales volumes was seen across the country. "Media reports of a buoyant housing market over the early part of the year are likely to be providing a support to buyer confidence at a time when the market tends to be slowing" comments Donnell.
"The continued growth in prices and rising sales levels suggest continued buyer confidence over the prospects for the market" comments Donnell. "However, with high house prices and stretched affordability levels buyer confidence is fragile. Unemployment levels have been quietly creeping up, and the prospects for the rest of the year hinge on market sentiment which is primarily driven by expectations for interest rates. Whilst there is clear momentum in the market we believe that a modest cooling in the rate of growth is likely over the second half of the year," he concludes.
| Headline statistics | Jun-06 |
| Weighted Overall Average Price | £165,500 |
| Weighted Overall Average Price Change | 0.6% |
| Change in number of new properties listed | 2.4% |
| Change in no. of sales agreed | 8.2% |
| Sales price as a % of asking price | 94.9% |
| Change in number of new buyers registered | 2.9% |
| Time taken to sell (weeks) | 6.5 |
| Average number of viewings per sale | 10.9 |