Housing market recovery spreads beyond south-east
The housing recovery has begun to spread beyond London and the south-east for the first time in ten years, according to market analyst Hometrack.Some 51 per cent of postcodes recorded a price increase during February, although growth remained most pronounced in London and the south-east, which witnessed rises of 1.1 per cent and 0.9 per cent respectively. Hometrack says average house prices rose by 0.7 per cent last month - the largest monthly increase since 2007.Demand rose by 17 per cent - the largest increase for two years. This is attributed to improved market sentiment occurring as a result of stronger house price growth and the government's Help to Buy initiative.While supply also rose by 11.2 per cent over the month as a result of improved market activity from existing homeowners, a continued imbalance between supply and demand is likely to exert an upward pressure on prices over the coming months. According to the survey, many buyers entering the market have no property to sell, meaning prices are more sensitive to changes in demand. In London, where there has been a below-average increase in supply, further price rises are likely."The housing recovery continues to spread across the country, building on the momentum that started a year ago," said Hometrack director Richard Donnell."This is the greatest coverage of house price growth for almost a decade showing the extent to which market sentiment has improved in the last 12 months."Mr Donnell said a moderation in prices is unlikely in the short-term due to the low level of mortgage rates.Recently, Nationwide published its House Price Index for February, which showed prices rising by 0.6 per cent on the previous month.House prices are 9.4 per cent higher than they were one year ago, although they remain three per cent below their pre-recession peak.Record low interest rates, improved credit availability and rising consumer confidence due to gains in employment were cited as factors driving the housing market recovery.
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