UK House Prices Record Strongest Monthly Jump In Three Years, Survey Shows

on Mar 26, 2013

**UK Residential Property Values Log Fastest Growth Since 2010**

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Britain’s residential property prices recorded their strongest monthly jump in three years in March, driven by a notable improvement in the capital city, with concerns over the crisis in Cyprus and the Eurozone likely to spur more London property investments in the coming months, a survey by real estate researcher Hometrack showed on March 25.
On a yearly basis, UK house prices remained flat in March, marking the first time they have not fallen since September 2010. In terms of month-on-month comparison, residential property values in the country advanced the most in three years. Seven of 10 UK regions assessed by Hometrack showed price increases in March compared to the prior month. Two showed no change and one, the northeast, recorded a 0.1 percent drop. According to the data, this month house prices in England and Wales were up 0.3 percent from February — the biggest monthly increase since March 2010.

**London Remains Safe Haven for Property Investments**
Hometrack’s March figures also showed that London witnessed the highest increase since February 2010, with home values rising 0.7 percent from the previous month, with 60 percent of the capital’s postcodes experiencing an increase in house pricing levels. The strong uplift once again indicated the growing divide between the capital’s property market and the rest of England and Wales. Being a safe haven for property investments, London’s real estate market has always attracted great interest from overseas buyers.

Looking ahead, Hometrack predicted a further increase in the flow of international property investments into London. Richard Donnell, director of research at Hometrack, anticipated that wealthy overseas buyers will be looking even closer into buying homes in the UK capital over the coming months. He said in a statement: “The weakening pound and concerns over Cyprus and the Eurozone will only serve to further boost the flow of international funds into the capital.”

**Market’s Supply-Demand Dynamics Also in Support of Further Price Increases**
!m[March Figures Driven by London Surge, Eurozone Concerns Likely to Spur More Property Investments in the Capital](/uploads/story/1713/thumbs/pic1_inline.png)
According to Hometrack, the recent notable house price increase in the UK comes as demand for properties in the country outstripped supply. “Low growth in the number of new homes coming to the market, rising demand at a seasonally strong time of the year, and a jump in sales agreed has led to depletion in the number of homes for sale which in turn has reinforced scarcity and price rises,” said Donnell. As estimated by the real estate research firm, residential property demand in Britain jumped 19 percent over the last two months, while the number of homes for sales climbed 13 percent.

The Bank of England’s Funding for Lending programme has also helped ease lending conditions, thus boosting prices, while plans announced by the government last week to assist prospective homebuyers will also support the market, Donnel stated. Ha added, however, that “while scarcity of homes, support for lending and new housing will all act as a support to pricing levels, the problems of affordability and deposit levels still remain serious impediments to a full blown housing market recovery.”


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