House prices increased by 0.4% in June, matching the growth in May which was the highest increase in a single month since June 2007, Hometrack reports.
The momentum in house price growth over the first half of the year has been driven by a widening imbalance between supply and demand. The gap stabilised in June with slower growth in demand (up 1.6%). A seasonal slowdown in demand is to be expected as we approach the summer.
Two factors are adding to the pressure on supply – first is an increase in numbers of first time buyers who add to demand but have no property to sell. Secondly, existing owners are looking to secure a property to buy before putting their homes on the market.
Prices grew across 31% of postcodes in June – this is the highest level since September 2007. In contrast, house prices fell in just 3.1% of postcodes, the lowest level for 3 years (June 2010).
London registered the strongest growth in June with prices rising by 0.9% for the second month in a row.
While market conditions have improved house prices remained unchanged in four out of ten regions.
The time on market has fallen to 8.4 weeks on a national basis. In London it is half the national rate at 4.1 weeks – the lowest since September 2007. In the midlands and northern regions the time on market is improving slowly but still stands at over 10 weeks on average.
The proportion of the asking price achieved is an important lead indicator for house prices. In recent months it has been rising across all regions as market conditions improve. In London the percentage is over 96%, the highest for six years (June 2007).
Hometrack expects prices to increase, though at a slower rate, heading into the summer months. While demand is improving buyers remain price sensitive and aggressive pricing of stock is the most likely factor to curtail house price growth in the coming months. document.currentScript.parentNode.insertBefore(s, document.currentScript);