Boom conditions are back in the UK housing market and prices look set for a new surge before the end of the year after the Conservative election victory has galvanised buyers and sellers.
As the Land Registry reported prices in England and Wales had risen in April – leaving the average value of a home just £1,200 below its pre-financial crisis peak of 2007 – economists said they now expected further increases in the months ahead.
House prices resume growth, says Land Registry
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The annual rate of house price inflation, which at 5.1% had reached its lowest level for 14 months, could be about to take off again. Matthew Pointon, property economist at City consultancy Capital Economics, said that with the stock of homes for sale at a historic low, “the conditions are in place for further price gains this year.” He added: “The low point for the annual rate of house price inflation is now in sight.”
Steven Bell, chief economist at City fund manager F&C Investments, said competition between mortgage lenders, together with rising incomes and falling arrears, were all boosting the supply of home loans and pushing up prices. “In the UK housing market, the global financial crisis seems a long time ago,” he said.
The Land Registry figures – which are regarded as the most accurate because they reflect completed transactions rather than asking prices or mortgage loans – showed that prices rose by 0.9% in April across England and Wales, following a 0.8% dip in March.