House prices set to rise further after jumping 4.4% in 2013

Broader based recovery in housing market dependent on ‘real’ economic growth

Resurgent demand and a falling supply of new homes helped to push house prices up by 4.4 per cent in the last year, reversing the fall of 0.3 per cent seen in 2012, property analysts Hometrack reported today.

“Demand grew at the fastest rate for three years while the supply of homes for sale grew at the lowest level recorded over the 12 year history of the survey, “ said Richard Donnell diretcor of research at Hometrack.

“Scarcity of supply was the result of higher sales volumes eroding the stock of homes for sale. The launch of Help to Buy was a clear sign of Government support for the housing market which encouraged a sustained increase in buyer numbers, especially over the second half of the year.

“Record low mortgage rates also played an important role in higher prices over 2013.”

Demand for housing grew by 25 per cent in the last year while the supply of homes for sale rose by just 6 per cent.

However, Hometrack’s data for December, gathered from estate agents, showed the first fall in demand and in new sales for 11 months.

Mr Donnell said this refelected a normal seasonal slowdown in housing market activity and pointed out that prices had still risen by 0.5 per cent in December, making it the fourth month in a row to show growth.

London and the South East continued to drive the housing market with annual price rises of 9.1 per cent and 5.0 per cent respectively.

Only the North saw a fall in prices – down 0.5 per cent – but Yorkshire and Humberside, at 0.4 per cent and the North West at 0.5 per cent saw growth well below the national average.

This trend is set to continue. Mr Donnell said: “Overall we expect the momentum in house price growth to spill over into 2014 supported by a continued lack of supply and rising demand.

“The strongest market conditions and impetus for price inflation is set to remain focused on southern England in 2014. A broader based  recovery in the housing market is dependent upon growth in the real economy, jobs and household incomes.”

London has been the driving force for house price rises for the last three years. Hometrack said that the percentage of homes fetching their asking price in the capital is at its highest level since it started its survey in 2001.

Mr Donnell said that Chancellor George Osborne’s introduction of capital gains tax on overseas home owners and the growing noise about a possible mansion tax in the run-up to the 2015 election could dampen demand for the most desirable parts of central London.

He added: “Domestic demand, powered by low mortgage rates, is likely to drive the market ahead in 2014, although lower yields means investors are becoming more reliant on capital gains to boost returns and this increases the sensitivity of this group to higher mortgage rates.

“Any slowdown in London will impact sentiment across the wider housing market as well as the overall rate of growth.”

Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites those Star Wars rumours
News
Russell Brand has written a book of political analysis called Revolution
peopleFilm star says he is 'not interested in making money anymore'
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
News
people

Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'

PROMOTED VIDEO
Arts and Entertainment
JK Rowling is releasing a new Harry Potter story about Dolores Umbridge
booksChristmas comes early for wizard fans
News
news

Emergency call 'started off dumb, but got pretty serious'

Arts and Entertainment
On The Apprentice, “serious” left the room many moons ago and yet still we watch
tv

Greatest mystery about the hit BBC1 show is how it continues to be made at all, writes Grace Dent

News
i100
Arts and Entertainment
filmsOculus Rift offers breathtakingly realistic simulation of zero gravity
News
news
News
ebooksAn unforgettable anthology of contemporary reportage
News
peopleCampaign 'to help protect young people across the world'
Life and Style
tech

News
people'When I see people who look totally different, it brings me back to that time in my life'
Arts and Entertainment
A scene from David Ayer's 'Fury'
film

"History is violent," says the US Army tank commander Don "Wardaddy" Collier

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker