House prices have risen by 0.6% in April, the latest survey from Hometrack claims.
The increase is the highest monthly rise for almost 2 years driven by values rising across 36% of the country, it says, although typically London and the South East have seen the most growth.
House prices remained unchanged across 60% of the country over April and there are some early signs that levels of market activity may start slow in the run up to the summer. The national average house price now stands at £163,500, says Hometrack.
Richard Donnell, director of research, says the results show a clear and ongoing north-south divide in the performance of the housing market.
“London continues to be the engine for national house price growth with values in the capital moving 1.2% higher over the month and by over 3% over the last quarter. In contrast, growth in the regions away from the south of England has totalled less than 0.5% over the last three months” he adds.
The strong performance by London is down to an on-going mismatch between the number of homes coming to the market for sale and the growth in demand.
The supply of homes for sale has grown by 14% over the last quarter, but demand has far outstripped this growing in excess of 50%.
Meanwhile the average time to sell a property has fallen rapidly in London to 4.2 weeks while remaining relatively high in the East Midlands (8.9), the North West (8.7) and Wales (8.4).
Donnell adds: “The outlook for house price growth over 2006 is really dependant upon whether recent levels of house price growth in the London market can be sustained. In the short term, prices in London are likely to be supported by an ongoing shortage of housing for sale. However, the current level of growth is unsustainable over the longer term as house prices in the capital still remain relatively high. Away from the capital we are likely to see only modest levels of growth over the rest of the year.”
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