U.K. house prices had their biggest annual gain in 3 1/2 years last month as a shortage of property for sale supported values, Acadata said.
Prices in England and Wales rose 7.2 percent from a year earlier to 262,291 pounds ($440,000), the real-estate researcher and LSL Property Services Plc said in a report in London today. That’s the fastest increase since Sept. 2010. From the previous month, prices jumped 1 percent, led by London.
While growth in home sales was slower than usual for a March, that was probably partly due to heavy rain and flooding the previous month, and Acadata said Britain is now in a period of “sustained house-price acceleration.” Bank of England officials kept their key interest rate at a record low yesterday and have said they’re monitoring the property market for signs of unsustainable growth.
“A rejuvenated economy, a more accessible mortgage market and better employment prospects are underpinning greater confidence among aspiring buyers,” said David Brown, commercial director of LSL. “The relentless property market in the capital continues to surge ahead. The heat is radiating outwards through the regions.”
Sales probably rose 1.5 percent last month from February, less than the typical 24 percent increase, as the wettest winter for almost 250 years deterred buyers, Acadametrics said.
London was the best performer out of 10 regions tracked in the report, with a 13.3 percent increase in the past quarter compared with a year earlier. That was followed by a 6 percent gain in the commuter area in the south east of England.
In a separate report, e.surv chartered surveyors said the pickup in home loans may cool as new mortgage rules come into effect later this month. Approvals fell 7 percent in March from February, a second consecutive decline, it said.
Home-price inflation may also come under pressure as high values lock more Britons out of the market, Acadata said.
“Without more properties coming to the market we could see a halt to this progress,” Brown said. “We need more homes, not just to satisfy the growing demand, but also to prevent prices from rising out of reach, particularly in London.”
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