House prices rise as supply fails to keep up with solid demand

Tim Wallace
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HOUSE prices rose sharply in March thanks to a lack of supply and the expiry of the stamp duty holiday, but are set to stagnate over the rest of the year, figures from Hometrack suggested today.

Prices rose 0.2 per cent in the month, the survey of 1,500 agents and surveyors showed, after 20 months without growth.

The small rise in prices reduces the annual fall to one per cent, from the 1.4 per cent in the year to February and 1.6 per cent in the year to January.

The proportion being sold for the asking price rose from 92.5 per cent in January to 93 per cent in March, indicating growth strength in the market.

The number of new buyers registering with estate agents rose for the second month running, though at 4.4 per cent it was well below February’s 18.1 per cent rise.

Meanwhile new house prices reached a 40-month high of £229,398 according to Smart New Homes, up 0.2 per cent on the month and 4.7 per cent on the year. The highest prices are in London, at £358,363.

The number of new homes rose for the third month in a row in February, and the Smart New Homes expects this trend to continue.

“The shortage of property is the biggest threat to home ownership, but the introduction of the national policy planning framework promises a step change in how planning is granted for new developments, meaning many more new homes are expected to be built in areas where they are most needed,” said director Steven Lees.