U.K. house prices rose to a record in January as the improvement in the property market spread beyond London and first-time buyers boosted sales, Acadata said.
Values in England and Wales increased 0.6 percent from December to 241,101 pounds ($401,500), the real-estate researcher and LSL Property Services Plc said today. All 10 regions tracked by the report registered growth in the latest three months, with London jumping 10.6 percent.
“The U.K. housing market is roaring back to life in 2014 as the recovery continues across the board,” said David Brown, commercial director of LSL. “With mortgages still historically cheap and interest rates set to remain stable for the time being, we’ll continue to see new buyers rush to the market.”
Home prices rose 5.2 percent in January from a year earlier, while sales advanced 67 percent, the report showed.
Low borrowing costs and government incentives are spurring demand for homes, fueling concern that prices may spiral. Bank of England Chief Economist Spencer Dale said yesterday that while the market isn’t heading for a bubble, policy makers are “watching it very carefully” after ending mortgage aid through the Funding for Lending Scheme at the end of last year.
First-time buyers are being encouraged by competitive products and easier access to higher loan-to-value mortgages, Acadata said. Price growth and sales are below their pre-crisis peaks and the market is “some way” from a bubble, it said.
House prices are seeing “widespread and sustained recovery” and will continue to outpace inflation this year Acadata said. Increases are “rippling out from London across southern England and East Anglia and then moving north and west through the midlands.”