U.K. house prices had their biggest annual increase in more than 2 1/2 years in April, led by gains in London, the Land Registry said.
Home values in England and Wales rose 8.5 percent from a year earlier, the most since September 2007, the Land Registry said today on its website. Prices increased 0.2 percent from the previous month to an average of 165,596 pounds ($239,600).
Recent price gains in the housing market have been in part driven by a shortage of supply. Hometrack Ltd. said yesterday that prices rose 0.2 percent in May from April and highlighted a “scarcity of housing for sale.” The pace of price gains may be restrained as unemployment at a 16-year high and limited access to credit deter buyers.
“The economic fundamentals are still far from robust for the housing market,” Howard Archer, an economist at IHS Global Insight in London, said in a research note today. “House prices are likely to be erratic over the coming months and at best will make very modest gains over the rest of the year.”
Prices in the capital climbed 14.8 percent from a year earlier, and all 10 regions tracked by the Land Registry showed annual increases. Values in the Northeast England had the biggest monthly gain, rising 3.1 percent from March.