U.K. House Prices Increase to Record as Recovery Goes NationalEshe Nelson
U.K. house prices rose to a record last month as easing credit availability drove buyers back to the market in all regions of England and Wales for the first time in almost three years, Acadametrics said.
Values increased 0.6 percent from September to an average 237,161 pounds ($380,500), the London-based real-estate researcher and LSL Property Services Plc said in a report today. Annual price growth increased in all 10 regions tracked by Acadametrics for the first time since November 2010 as values climbed an average 4.3 percent from a year earlier.
The government’s Help to Buy program that aids buyers with smaller deposits has fueled an increase in property demand. It’s also been criticized for risking a property bubble by not addressing the shortage of supply. Former Bank of England policy maker Marian Bell said yesterday it was “not a good idea” as it encourages overburdened households to take on more debt.
“The increased availability and competitiveness of mortgages has opened the door to a new wave of aspiring buyers who had previously been persistently locked out,” said Richard Sexton, director of e.surv chartered surveyors, part of LSL. “The stark rise in first-time buyer activity in particular has given the speed of recovery an even greater uplift.”
Acadametrics said while signs of a national rather than regional recovery is “good news,” it also suggests the Bank of England should intensify its oversight of the market.
“Much has been made of the selective recovery in the arguments as to why we should be relaxed about the housing market improvement,” it said. “Once it becomes a universal process then the arguments shift.”
Property sales may rise 15 percent this year to more than 750,000, according to the report. Transactions exceeded 79,000 last month, the most for an October since 2007. The property researcher forecast that house-price increases will reach an annual average rate of 5 percent by the end of the year.