U.K. house prices increased for the first time in three months in August as demand rebounded from a lull earlier in the summer, Acadametrics Ltd. said.
The average cost of a home in England and Wales rose 0.1 percent from July to 226,243 pounds ($364,400), Acadametrics and LSL Property Services Plc said in a report published in London today. Prices climbed 2.6 percent from a year earlier.
“Rather than signaling a radical shift in the housing market, the improvement reflects a mini-resurgence following more sluggish buyer activity earlier in the summer, affected by a combination of the Jubilee bank holiday and historically heavy rainfall,” said Richard Sexton, director of LSL’s e.surv business. “In reality, obtaining a big-enough mortgage remains a hurdle for thousands of first-time buyers.”
With the housing market struggling to recover, the Bank of England and the Treasury last month started a program to help boost the flow of credit, while the government has relaxed planning rules to help spur building. Construction output dropped 3.9 percent in the second quarter.
In London, average prices jumped 10.5 percent in July from a year earlier, Acadametrics said. The increase was led by a 32 percent surge in Kensington and Chelsea as well as gains of 19 percent in Hammersmith and Fulham and 18 percent in Westminster.
Nationally, transactions rose 2.5 percent last month from July, Acadametrics said. While house sales are at the highest level this year, they’re still at only 63 percent of the average in the period 1995-2011.
Acadametrics and LSL combine initial transaction data from the Land Registry and results from other price measures to produce their housing index. They said their price measure is showing rising values nationally because, unlike other companies, it includes cash sales.
“Given that Greater London is the biggest contributor to rising house prices, and that a significant percentage of these transactions are for cash, particularly at the top end of the market, this is a very important factor driving the LSL Acad index,” they said in the report.