Hometrack: House price growth "modest"

Tuesday, 31 October 2006 12:00 AM

Across England and Wales, average residential values have grown by 0.4 per cent over October, but this change has largely been down to London and the south-east, according to Hometrack.

The housing market survey also finds house prices went up in just a quarter of England and Wales' regions in October, representing an "extremely modest" 12-month growth for "large swathes of the country".

However, on a national level, the survey shows that the year on year rate of growth has hit the fastest level for over two years, currently standing at 4.9 per cent.

Hometrack director of research Richard Donnell commented: "The strong growth in house prices across London and the south-east continues to put a major gloss on the apparent strength of the national housing market."

However, Hometrack finds the number of properties coming onto the market in London has risen for the first time in five months, thought to be down to buyers still wanting to take advantage of the current strength of the market.

Hometrack said that it was yet to be seen whether sellers' prices would be realistic.

"A flood of potentially over-priced properties coming to the market would certainly put an end to the recent level of price rises," said Mr Donnell.

Outside of the south-east, Hometrack's research shows buyers are being cautious, despite there being "decent levels" of properties on the market.

Mr Donnell said: "Pricing levels are going through a prolonged period of re-adjustment in the wake of strong growth which took place between 2000 and 2004. Judging by how long it took the London market to adjust between 2001 and 2005 this is a trend that may well last well into 2007."

Mr Donnell concluded: "House prices look likely to end the year up by around five per cent with average growth in London likely to be closer to 12 per cent.

"However, there are clear signs that the momentum in the London market is starting to slow and this is likely to continue in the run up to the new year."

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