5 Oct

House prices edge ahead, but only in the South

House prices edged ahead by 0.2 per cent during September, as the number of people looking to rent a home has also picked up. The average home in England and Wales is now worth £156,100, only 5.6 per cent less than a year ago, according to Hometrack, the property intelligence group.

The market continued to recover more quickly in southern regions than northern ones, with London and the South East rising the most, by 0.4 per cent and 0.3 per cent respectively. The South West and West Midlands also saw a slight growth, 0.1 per cent each, but the rest of the country stayed the same. Despite the overall growth, only 15 per cent of postcode areas saw an increase during September, with prices unchanged in more than four fifths of the country.

Richard Donnell, Hometrack's director of research, said the recent stabilisation in the property market was down to the shortage of property available.

"While a lack of housing for sale is providing a support to prices, talk of a general improvement in properties and equities is leading to increased market confidence," Mr Donnell said. "However, a fundamental imbalance still exists between supply and demand and question marks remain as to how long this situation can last and how resilient the market will be to changes in both levels of demand and sentiment."

Separate research from the Association of Residential Letting Agents, Arla, found that the letting market is beginning to stabilise, with property oversupply decreasing across Britain and the number of new tenancies increasing. Almost a third of those surveyed felt supply and demand property was now in balance, compared with one in five last quarter.

And in a further sign demand is picking up, more than four fifths of agents said they signed up 10 or more tenancies during the period, a rise of four per cent from the previous quarter.
Ian Potter, operations manager of Arla, said: "It gives further evidence to suggest that the property market as a whole is getting back on its feet.

"This shift also indicates that confidence is rising among prospective tenants; it seems that people who delayed setting up home 12 months ago, now feel secure enough to proceed." 

The Telegraph. (2009). House prices edge ahead, but only in the South. [Online]. Available from: http://www.telegraph.co.uk/finance/economics/houseprices/6228711/House-prices-edge-ahead-but-only-in-the-South.html Accessed 5th October 2009.