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March Market Update

February 26th 2014
By: Jon

Homes are now selling at their fastest rate since 2007 and prices have risen over 1.5% over the last month.  According to the latest research, this is the greatest monthly price leap since May 2007.
 
Prices in Greater London increased even further and are up 16.7% year on year – data from Home.co.uk.
 
The average time that a house spends on the market is now three days fewer than February 2013 – there are 11% less properties on the market now nationwide, and in Greater London – 28% less than this time last year.
 
Price are increasing in Scotland, Wales and every English region with demand being pushed by the government’s Help to Buy scheme and the low mortgage rates.
 
There is strong competition for all properties across London and this has driven the annualised asking price to 16.7%.  The lack of properties available continues to worsen across southern and eastern areas of England and Wales but is particularly severe in the capital.
 
The number of new properties that entered the market last month was down 11% compared to last year.
 
It is believed that 20.2% price growth will be achieved in 2014 in the London property market because of the rate of acceleration of prices.  Only 55% of the current properties for sale in this region are below the £600k threshold for the Help to Buy scheme.  This part of the market is likely to become a minority as prices continue to rise.
 
With 28% less properties to choose from compared to a year ago, London gazumping and price rises while properties are on the market are two frustrations for the buyers to cope with.  Property time on the market in London is now only 67 days – the lowest February figure since 2007.
 
‘Home prices are rising unsustainably fast in London and the South East. Rapidly rising house prices precipitate a groundswell of support for current economic policy and makes banks and building societies' lending books look much more solid,’ said Doug Shephard, Director at Home.co.uk.
‘However, inflating the cost of housing does nothing for the nation's international competitiveness and will only hasten the current tide of quality jobs heading overseas. Until interest rates return to normal levels and government incentives for buyers cease, we remain in an artificial market subject to the vagaries of government policy and economic tinkering on an unprecedented scale,’ he added.
 
The time taken to agree a price might be at its lowest level for 6 years, but because of more stringent financial procedures, the time between an agreed sale and exchange has increased by a week to 11 weeks since 2013.