House prices growing at 'fastest annual pace since 2007'

Year-on-year increase of 6.3%  in prices is the highest annual rise seen since November 2007

The housing boom is continuing apace with London sellers' asking prices jumping by 7 per cent annually in January, according to Rightmove.

Asking prices increase by 1 per cent month-on-month across England and Wales in January to reach £243,861 on average, marking the biggest monthly jump it has seen for this time of year in records going back to 2002.

The year-on-year increase of 6.3 per cent in prices is the highest annual rise seen since November 2007 as sellers anticipate a fresh surge in buyer demand in 2014.

Asking prices in London recorded the strongest annual rise, with a 7 per cent increase taking the average price to £514,704.

Miles Shipside, director of Rightmove, said: "This is the strongest start to a new year for house prices that Rightmove has ever recorded, and that will get some potential sellers salivating at the thought of better moving prospects."

Over the last decade, the month of January has seen asking prices on Rightmove fall by an average of 0.2 per cent on the previous month as housing market activity usually slows down around Christmas.

In another indication that the market is gearing up for a further burst in activity, the website said that traffic to its website has reached a new high for January, with the number of pages of property viewed on Rightmove rising by one fifth (20 per cent) on the same period a year ago.

A new phase of the Government's flagship Help to Buy scheme was launched last October and lenders including Barclays, Santander, NatWest and Halifax have come on board the scheme, which offers state-backed mortgages to credit-worthy people who have struggled to move on to or up the property ladder because they have only a low deposit saved.

The choice of mortgage deals for people with a 5 per cent deposit has more than tripled since the new phase of Help to Buy was launched in October, according to figures from financial information website Moneyfacts.

As demand rises, the lack of choice of properties available for potential buyers to choose from is helping to fuel the upswing in sellers' price expectations. Rightmove said that the average stock of homes for sale per estate agency branch has fallen to its lowest level since February 2007, having dropped from 64 properties a year ago to a current level of 58.

Shipside said: "With buyer demand on the up and price levels having hardened, the likelihood of finding a buyer at an acceptable price will be a potential boost to new seller numbers, especially for those trading up and needing a decent deposit to access more competitive mortgage rates.

"Help to Buy phase two will assist new supply further by helping to increase the availability of low-deposit mortgages for existing home-owners, finally enabling 'trapped sellers' to move."

Additional reporting agencies

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