U.K. House Prices Surge Most Since 2007 as Demand RisesFergal O’Brien
U.K. house prices rose the most in more than six years this month amid a continued increase in demand that’s being partly driven by government measures.
Average values in England and Wales rose 0.5 percent, the most since May 2007, after a 0.4 percent gain in August, London-based property researcher Hometrack said in a statement today. Annual price inflation accelerated to 2.4 percent.
Prime Minister David Cameron defied critics of “Help to Buy” yesterday, saying the second phase of the plan aimed at helping prospective buyers will start next week, three months earlier than planned. The program has drawn criticism that it may help fuel a property bubble and the government said last week the Bank of England will perform annual checks.
“Over the last few years, the housing market has been split between a buoyant London, boosted by overseas demand, and a trend of falling prices across other regions,” said Richard Donnell, director of research at Hometrack. “Now we are seeing continued house-price growth in London combining with modest gains across other regions and creating a picture of a broadening market recovery.”
Prices rose in September in nine of 10 regions tracked by Hometrack, according to the report. London led gains on the month, with a 0.8 percent increase.
Nationally, the number of buyers registering with realtors increased 1.4 percent in September from August, while new property listings fell 0.3 percent. In the capital, listings dropped 2.9 percent, according to Hometrack. The report follows data from Nationwide Building Society showing home-price growth quickened this month
“In many markets outside London this is the first time that prices have started to register positive growth for over 5 years,” Hometrack said. “Prices are rising off a low base and talk of a housing bubble in relation to the national market is overdone.”
That echoes comments from the BOE’s Financial Policy Committee on Sept. 25, when it said that property activity remains below its historic average. In the statement following its quarterly meeting, the panel added it will “closely monitor developments in the housing market and banks’ underwriting standards” and be “vigilant to potential emerging vulnerabilities.”
In a separate report published today, Knight Frank LLP said London luxury-home prices rose the most in five months in September as more buyers sought properties for less than 2 million pounds ($3.2 million) to avoid a sales-tax increase.
The average value of a house or apartment in the city’s most expensive neighborhoods climbed 0.7 percent from August, an index compiled by the broker showed. That brought the gain for the past 12 months to 7 percent.
Deloitte meanwhile said confidence among chief financial officers rose for a fifth consecutive quarter and is close to the highest in almost three years.
Fifty-four percent of CFOs said that “now is a good time to take greater risk,” the most since the third quarter of 2007 when Deloitte started the survey. Uncertainty about external economic factors dropped to 62 percent from 97 percent two years ago.
Deloitte surveyed 116 CFOs from FTSE 100 and FTSE 250 companies between Sept. 6 and Sept. 23.