In Britain's hot-spots, homes are selling in just a week

Click to follow
The Independent Online

One in seven homes in Britain is sold within a week, according to a survey published on Friday that identified the top property "hot spots".

One in seven homes in Britain is sold within a week, according to a survey published on Friday that identified the top property "hot spots".

The typical time to sell a property is nine weeks - the fastest average on record, the study said. More than half of homes sell within six weeks. The survey, commissioned by the Bradford & Bingley building society, comes just days after official data showed the price of the average home surged 15 per cent in 1999. It is the latest evidence of a worrying bottleneck in the market. The B&B said the top "hot spots" were Ipswich in Suffolk and Horsham, West Sussex, where houses changed hands in under a week. Eastern England was the fastest region with homes selling in an average of seven weeks, compared with the slowest, the North-west and North Wales, at 11 weeks.

"With six buyers registered for every property that comes on to the market nationally, the shortage of homes for sale continues to be a problem," said David Woodcock, managing director of B&B's estate agency business. He said the bottleneck was tightest in the South-east where the ratio of buyers to homes was 13 to one. B&B also found that properties achieved an average of 97 per cent of the asking price - a sign that purchasers are so keen to buy they do not bother to haggle.

The latest evidence of the strength of the housing market, and therefore the consumer economy, will add to pressure on the Bank of England to raise interest rates. It will also lead to more calls for the Chancellor to use the Budget to dampen down the housing market.

Yesterday Eddie George, the governor of the Bank of England, said rising house prices were a clear sign that consumer spending would remain firm. Even the Confederation of British Industry, which says interest rates must be cut to throw a lifeline to businesses, said it was hard to argue for rate cuts when "house prices in London are rising by 29 per cent a year".

Gordon Brown may raise stamp duty - the tax on buying property - in his Budget, but one estate agent warned this would only aggravate the situation. He called for more greenfield sites to be allocated to house-building.

David Moulton, residential research manager at Knight Frank, said higher stamp duty would add to the cost of moving, deterring homeowners from putting their property on the market. "There's every likelihood that we could see house prices go up because it would exacerbate the imbalance between supply and demand," he said.

"We need to increase supply and we need to release more green fields. It is green and pleasant land but we need to see more homes on the green and pleasant land." This would anger green lobby groups and run counter to the views of John Prescott, the Secretary of State for the Environment, Transport and the Regions, who is considering ending VAT on brownfield site developments to take the pressure off the greenfields.

Interest rates have gone up four times in the past six months but one economist said they needed to go up further. Richard Jeffrey, of Charterhouse Securities in the City, said: "Rapid increases in house prices, and their consequences, are a reflection of an interest rate level that is too low and an economy that is growing too fast."

But Mr Moulton doubted rate hikes would have much impact as so many borrowers used fixed-rate deals that were unaffected by changes in monetary policy.

One economist offered a glimmer of hope. Brendan Baker, of Lombard Street Research, said higher rates had already taken the steam out of the market, which no longer resembled the "boom-bust" of the Eighties. "It seems the peak of the current housing upturn was passed in late 1999 and early 2000," he said.

Comments