London Home Prices Have Biggest New-Year Surge in Five YearsSvenja O’Donnell
London home sellers flooded the market in January and pushed up asking prices in the biggest new-year increase since 2008, Rightmove Plc said.
Asking prices in the capital rose 3.6 percent from the previous month to an average 480,890 pounds ($764,000), the property website operator said in a report today. Prices rose 9.7 percent from a year earlier, the biggest annual increase since February 2010. Nationally, prices rose 0.2 percent.
The number of new properties hitting the London property market rose 29 percent from a year earlier. If that becomes a trend, Rightmove said it could help to better balance supply and demand and slow house-price growth. Demand in London has boosted values and helped the city outperform the rest of the country over the past year.
The continued increase in London prices “restricts any recovery in transaction volumes that deliver the level of fluidity that a vibrant and healthy market needs,” said Miles Shipside, director at Rightmove. Still, “the rush of sellers to the market this month could be an early signal that the heady rate of price increases is set to slow down, driven by stretched buyer affordability and more stock to choose from.”
Nationally, prices rose 2.4 percent in January from a year earlier to an average 229,429 pounds, Rightmove said. Recent reports have indicated credit availability is improving as the Bank of England’s Funding for Lending Scheme starts to take effect. Acadametrics Ltd. said last week that home values may record a modest increase this year, though the outlook for the economy remains uncertain.
In a separate report today, the Centre for Economics and Business Research forecast that U.K. house prices will rise 0.8 percent this year. It also predicted that the average value will reach 223,000 pounds in 2014, surpassing the 2007 pre-crisis peak for the first time.
Rightmove said that new sellers in London will raise prices by 3 percent this year, less than the 6.8 percent increase recorded in 2012. Across the U.K., both values and property transactions will increase in 2013, it said.
“The thaw will also be helped by growing confidence that prices are more likely to go up than down,” Shipside said. “There is an increasing body of evidence suggesting genuine ‘green shoots’ of recovery after a prolonged period of the housing market bumping along the bottom.”
In a separate report today, the British Retail Consortium said the number of shoppers visiting stores in U.K. fell 1.2 percent in December from a year earlier. At shopping malls, so-called footfall dropped 2.8 percent, it said. The report follows data on Jan. 18 showing that U.K. retail sales unexpectedly fell 0.1 percent in December from November.
-- Editors: Fergal O’Brien, Eddie Buckle