U.K. house prices rose for the first time in nine months in February as demand for homes increased in London and southern England, Hometrack Ltd. said.
Prices in England and Wales advanced 0.1 percent from the previous month, the property researcher said in a statement today. The number of new buyers registering with agents rose 14.3 percent on the month, outpacing an 8.7 percent increase in supply. From a year earlier, values were down 0.1 percent.
“The impetus for improved market conditions and higher prices has been driven by London and the home counties of southern England, where there is the greatest mismatch between supply and demand,” said Richard Donnell, director of research at Hometrack. “We expect demand for housing to continue to grow as we move into spring.”
While higher inflation has squeezed households, the Bank of England’s Funding-for-Lending Scheme has boosted credit availability, with policy maker Paul Fisher noting that mortgage activity is beginning to revive. Nationwide Building Society said last week that house prices rose in February and there were reasons for “cautious optimism.”
In London, values rose 0.3 percent in February from January, Hometrack said. New buyer registrations in the capital increased 18.5 percent.
Still, the strength of the economic recovery remains uncertain, with a Markit Economics index on March 1 showing that manufacturing unexpectedly shrank in February as new orders plunged. The same day, the Bank of England said mortgage approvals unexpectedly declined in January.