U.K. house prices increased for a 14th consecutive month in March, the longest run of gains in almost seven years, as momentum spread across the country.
Values in England and Wales rose 0.6 percent from February, with the southwest and East Anglia registering the largest increases, property researcher Hometrack Ltd. said in a report published today. Prices in London climbed 0.7 percent, while 50 percent of postcode districts reported gains.
Record-low borrowing costs and a government-incentive plan have spurred concern that the U.K. housing market risks overheating. Bank of England financial stability officials said last week there’s increasing momentum in the market and pledged to take more action if needed.
“Half of the country registered a price increase in March for a second month in a row,” said Richard Donnell, director of research at Hometrack. “The real driver of higher house prices is record-low mortgage rates and strong demand from first-time buyers and investors who have no property to sell.”
Yorkshire and Humberside and the northwest region registered the smallest gains, with values increasing 0.2 percent in March. Prices in the southwest and East Anglia increased 0.8 percent.
Nationally, prices rose 5.7 percent in March from a year earlier and the annual rate of growth was positive across all regions for the first time since September 2007, Hometrack said. The proportion of sellers achieving their asking price was 96.2 percent in March, the highest since 2004. In London, the proportion was 99.3 percent.
BOE officials adopted measures to restrain housing by ending mortgage incentives under its Funding for Lending Scheme in November. While the Financial Policy Committee said this month it will “remain vigilant,” it also noted that a number of indicators remained below their long-run average levels.
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