London Homes Sell at Fastest Pace Since 2007 as Prices RiseScott Hamilton
London homes changed hands at the fastest pace since 2007 in April as the capital’s property market drove a third month of U.K. house-price increases, according to Hometrack Ltd.
Average values in England and Wales increased 0.3 percent, the same as in March, which was the largest gain in three years, the London-based property researcher said in an e-mailed statement today. In the U.K. capital, prices jumped 0.7 percent and homes stayed on the market for an average of 4.6 weeks, the least since October 2007.
“The real driver of price rises in April has been the London market where demand has grown three times faster than supply over the last quarter,” said Richard Donnell, director of research at Hometrack. In the city, “key market indicators, such as the time on the market, are now back to levels last seen” during the peak in 2007, he said.
Better sentiment and a shortage of properties for sale are “key features” of the housing market that are supporting values, Hometrack said. Plans announced by the government last month to assist prospective homebuyers and the fact that the economy returned to growth in the first quarter will bolster confidence further over the coming months, it said.
Five out of 10 regions assessed by Hometrack showed price increases in April compared with the previous month. Four showed no change and one, northeast England, recorded a 0.1 percent drop. After London, the area with the next-largest increase was Wales with a 0.2 percent gain.
Demand for housing nationally rose at a slower pace in April, with new buyer registrations growing 3.1 percent, compared with 4.6 percent in March. Still, the supply of housing for sale failed to keep pace, with agents reporting a 2.8 percent increase in homes coming to the market this month.
“In each of the last three months, the growth in supply has failed to keep pace with demand and this is providing strong upward pressure on pricing particularly in those markets with the shortest selling periods,” Donnell said.
The time taken to sell a U.K. property fell to 9.1 weeks in April, compared with 9.5 weeks in March, Hometrack said.
Investors from regions such as the Middle East and the euro area are fueling purchases of real estate in prime London districts such as Belgravia, Knightsbridge and Mayfair as a haven from economic and political unrest at home. Former Bank of England policy maker Sushil Wadhwani said in an interview last week that “money seems to regard London and a few other places as the appropriate place for it to be parked” during a crisis.
The number of U.K. property transactions will rise by 7.4 percent this year and 7.8 percent in 2014 as the government’s “Help to Buy” program and increasing consumer confidence boost the market, Ernst & Young LLP’s Item Club said in a separate report today.
An April 27 report from Lloyds TSB showed the number of homes sold valued at more than 1 million pounds ($1.55 million) rose 2 percent to 7,397 last year, the highest level in five years. Still, the Lloyds Banking Group Plc unit said sales of homes worth at least 2 million pounds fell 2 percent to 1,584.
In a separate report today, Lloyds Bank said a survey of U.K. businesses showed their confidence in the economy compared with three months earlier rose to 27 in April from 20 in March. A gauge of their outlook on activity over the next year gained 2 points to 43.