U.K. house prices rose in January as strains in the mortgage market eased and funding costs fell, Acadametrics Ltd. said.
The average price of a home in England and Wales increased 0.2 percent to 227,478 pounds ($357,300), Acadametrics and LSL Property Services Plc said in a monthly report published in London today. From a year earlier, values gained 3.1 percent.
The Bank of England’s Funding for Lending Scheme has shown “encouraging signs,” though it’s still early days to gauge its success, Governor-designate Mark Carney said yesterday. The BOE held its target for bond purchases at 375 billion pounds and said it will reinvest the proceeds from maturing debt holdings to sustain stimulus in a “slow” recovery.
“Market conditions are certainly improving,” said David Brown, commercial director of LSL Property Services. “House prices and sales in 2013 will be closely tied to how well banks cope with the financial grenades being thrown their way by regulators and the euro zone.”
Acadametrics estimates that transactions rose 7.5 percent in January from a year earlier to 47,500. Out of the 10 regions tracked by the companies, six recorded an increase in annual prices and four posted declines, according to the report. London led gains, rising 9.4 percent.
BOE officials are counting on the FLS, which gives banks access to cheaper funding, to stoke the economy. Mortgage approvals rose to an 11-month high in December.
Separately, KPMG LLP and the Recruitment and Employment Confederation said a gauge of permanent job placements held at 53.2 in January. Readings above 50 indicate an increase in hiring. Permanent vacancies rose to a 21-month high.
Improvements in the mortgage market, along with signs of employment strength and increased first-time-buyer activity provide reasons for confidence in the property outlook, said Acadametrics Chairman Peter Williams.
“Hopefully this will tempt more sellers back into the market,” he said. “With new housing remaining in short supply, prices will be affected by such shortages, except in those areas where low demand and oversupply remain.”