Demand and supply imbalance fuelling house price growth: Hometrack

LONDON – House prices rose at their fastest rate in two years despite the increase in interest rates by the Bank of England in August, the latest survey by property consultant Hometrack said.

The annual house price inflation was 4.3 percent in September as compared to the previous year. This is the fastest growth in the last two years, Hometrack said. In September the actual rise in house prices was 0.4 percent, while the cost of an average UK home was 167,900.

“Despite the rate increase in August, house prices continue to rise as we start the autumn selling season,” said Richard Donnell, director of research at Hometrack. “Prices have risen in nine out of 10 regions over September, largely on the back of a 0.4 percent decline in the volume of homes available for sale over the month.”

Hometrack said the main reason for the rise in house prices was a lack of good properties coming onto the market. The disparity between demand and supply was most visible in London and the South East. Hometrack said prices here grew rose above the national average. Hometrack also said that the proportion of asking prices being achieved by sellers fell for the third month running in September.

Hometrack predicted that house price growth would slow down in the coming months, “Whilst the supply constraints are unlikely to disappear in the very short term, we expect the extent of price increases to continue to slow over the rest of the autumn,” Mr Donnell said.