3-yr top house price growth, despite rate hikes

3-yr top house price growth, despite rate hikes

Monday, February 26, 2007

House prices climbed in February at their fastest annual rate since June 2003, a survey showed this morning.

Hometrack revealed that house prices grew by another 0.7% in February in England and Wales. That's the biggest monthly rise since May 2004 and brings the annual growth rate to 6.4% from January's 6.0%.

Hometrack said that while the number of properties registered with agents grew 14%, the number of buyers rose 23%. As a result, prices shot up across 42% of the country, mainly in regions across southern England.

"Despite the January rate rise, it seems that a lack of supply is continuing to support higher prices, primarily in London and the southeast," said Richard Donnell, Hometrack's director of research.

"The reality is that house prices are being set by a narrowing spectrum of buyers, chasing a limited amount of supply," Mr Donnell added. "We need to see an increase in the number of properties coming to the market if the current upward pressure on prices is to be alleviated."

Hometrack also found that concern over higher borrowing costs and an unwillingness by vendors to put their property on the market when there was nothing suitable for them to buy were cited as the main reasons behind lacklustre activity levels.

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