If you needed further confirmation that house prices are continuing on their upwards trajectory, you've got it – the latest LSL/Acadata House Price Index has revealed that house prices have risen by 7.2% over the last year, reaching an average of £262,291 to post an increase of £17,500 in just 12 months.
It's a significant increase, not only in terms of value but also making it the highest annual rise since September 2010, when the property market was just beginning to recover from the crash. In fact, prices are now some 26% higher than they were during the financial crisis, after reaching a low point in April 2009.
Prices are rising on a more short-term scale too, as on a monthly basis they rose by a full 1.0% (or £2,500), marking the ninth successive month of increases. The pace of those rises has accelerated over the last quarter too – the previous month a rise of 1.2% was recorded, preceded by a 1.2% increase in January – and further increases are expected.
And it's even more intense in the capital. London is continuing to fuel the market with annual prices having risen twice as fast than any other region, increasing by 13% year-on-year, putting the average Londonproperty at a whopping £522,499.
There's no indication of the trend reversing either, at least not in the short term. Sales volumes continue to surge ahead – despite a slight drop in March they were still 22% higher than the same month in 2013 – but the increase in demand and lack of new homes available will put an upwards pressure on prise rises for some time.
"The bottom line is simply that we need more homes, not just to satisfy the growing demand but also to prevent prices from rising out of reach, particularly in London, where those at the lower end are already facing an uphill struggle," said David Brown of LSL. "The measures announced by the Chancellor in last month's budget - funding to unlock housing projects - is the first step, but it will be putting this rhetoric into practice and seeing new homes being completed that will be the key."
Hopefully the extension of the Government's Help to Buy scheme will boost levels of house buildings to help balance things out, while the soon-to-be-implemented rule changes following the Mortgage Market Review could well have an impact too. However, "the question is whether or not this will be sufficient to rein in what is now significant upward price momentum," said Dr Peter Williams of Acadata, with general consensus being that price rises will continue.
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