Indicating that confidence in the UK housing market is recovering gradually, house prices rose for the third straight month in April and marked the biggest increase in 14 months.
Sellers raised average asking prices by 1.8% month-on-month or GBP 3,996 to GBP 222,077 in April following the 0.9% increase in March, the country's largest property website Rightmove said Monday. Meanwhile, prices fell 3.2% in London, the only decline seen in nine of the 10 regions surveyed.
It could be argued that one or two months of rises is the result of traditional spring optimism and volatility caused by low volumes, but three months in a row and the largest rise for 14 months may indicate that we have finally reached a price floor and confidence is starting to return, Rightmove said.
However, the annual change in the headline house price index continued to remain negative with a fall of 7.3% in April after a 9% decline in March.
Miles Shipside, commercial director of Rightmove said, It looks like we are now bumping along the bottom of the trough, but for there to be any real sense of optimism that we're on a sustainable road to recovery.
He said the availability of mortgage finance needs to improve significantly, given that mortgage activity is currently running at around a third of its average levels between 2002 and 2007. Thankfully mortgage lenders are finally starting to release more funds to finance new house purchases, Shipside added.
The Bank of England had eased its key interest rate to a record low of 0.5% in April and undertook an asset purchase scheme of GBP 75 billion to smoothen credit supply in the economy. The central bank had reported a 19% increase in mortgage approvals for February.
In a sign that confidence is growing among sellers, the number of new sellers increased in April, with 22,000 per week, up 13% from March, the Rightmove report showed. However, it was still down 19% on April last year.
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