New Hometrack report

Index Hometrac

The prices of houses and flats in the UK rose 0.4% in may – the highest increase in a single month since may 2007, but the distribution of price growth across regions is uneven, leading in the race of prices, as always, the growth in property prices in London, especially podstegivaet price growth for elite real estate in London. The second indicator in the country – in the South-East.

Hometrack data show that property prices in London rose 0.9 percent in may and 0.5% of the price grew up in the South-Eastern part of England. But if we exclude these two regions from the statistics, it turns out that prices in the country rose by only 0.1%. Similar indicators shows an increase in the number of buyers, as if following the same trends in the market…. The lack of sufficient housing for sale – the main driving force of rising prices. Nationally, the number of new residential apartments and houses in the UK grew by 2.8% in may, and the number of transactions increased by 8.2%. . Such a huge gap between demand and supply was observed in last time in spring 2009. The gap between supply and demand for residential property in London has been unprecedented over the past 6 months the demand for residential property in London rose by 15% while supply has declined by 0.6%.

The rest of the UK price trends also characterized by excess of demand over supply, although to a much lesser extent than in London and the South-Eastern part. In four regions prices were static: is the North-East, North-West, Yorkshire and Humberside. In four regions prices rose is East Anglia, Mid-Eastern, South-West, Mid-Western part.

The average time of finding of the property on the market also decreases in all regions. The most dramatic decline was observed in southern England and 7.2 weeks compared with 11 weeks in Midline and Northern regions.

The share price at which the transaction is recorded, accounts for almost 94% of the asking price, which is the highest level since July 2010 and this proportion rose to 93.9 per cent.

And although the level of demand for housing is growing each month, this level is not formed due to the growth in the number of buyers, and due to the lack of new housing.

Respondents unanimously declare that the lack of housing for sale on the real estate market of great Britain is one of the biggest problems and the first time it is so acute over the past 15 years.

The high cost of the expenses when moving, the uncertainty of job prospects, lack of housing leads to the fact that homeowners do not rush to put their property on the market.

Speaking about the improving market conditions, we can assume that, most likely, in the near future the market will be more marginal sellers who can set their properties at unrealistically high prices. Which in turn will lead to a reduction in the number of sales and the period of the price adjustment.

Thus, the market is on the verge of another cycle, a series which we have seen in recent years.

® Helen Entree. 30.05.2013