U.K. House Prices Rise in Demand Boost That May Fade
U.K. house prices rose in April for a second month, according to Hometrack Ltd., which said gains may not be sustained as demand fails to keep up with supply.
Values rose 0.1 percent from March, when they increased 0.2 percent, the London-based property research company said in an e-mailed report today. An indicator of demand rose at half the pace seen in the previous month.
The property market received a temporary boost this year as first-time buyers rushed to take advantage of a tax holiday on some homes before it expired on March 24. Demand may be undermined by Britain’s return to recession and a continued squeeze on consumers from higher energy prices, Hometrack said.
“The short to medium-term outlook for prices hinges on the outlook for demand,” said Richard Donnell, director of research at Hometrack. “Conflicting reports over the strength of the economy and renewed fears over the prospects for the eurozone could over the coming months impact on buyer confidence. As a result, we expect price rises to flatten out as we move into the summer.”
The number of new buyers registering with real-estate agents rose 2.1 percent in April, compared with gains of 4.4 percent in March and 18 percent in February, which was the biggest in five years. Hometrack said the impact of the ending of the stamp-duty exemption is “starting to dissipate.”
The supply of properties, meanwhile, rose by 4.8 percent, up from a 3.6 percent pace in March, taking the increase over the past three months to 19 percent, the report said.
House prices rose in four of 10 regions monitored by Hometrack in April, led by a 0.3 percent gain in London. The company said there remains a divide between the property market close to the U.K. capital and elsewhere in the country.
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