House prices hit boom levels as first-time buyers flood in

Almost a third of postcodes saw rising house prices in June – the highest amount since the peak of the housing boom in September 2007, according to figures published today.

The Hometrack Housing Survey also reveals that average prices climbed 0.4 per cent in June, matching the growth recorded in May, which had been the highest monthly increase since June 2007. Prices rose across 31 per cent of postcodes and fell in just 3.1 per cent, the lowest level for three years.

The news comes amid concerns that the Chancellor George Osborne's vast Help to Buy programme of equity loans and mortgage guarantees could fuel a new bubble. It echoes figures produced by the building society Nationwide showing that June's house price inflation increased at its fastest pace since September 2010.

Prices are being pushed higher by an ongoing shortage of housing for sale, continued growth in demand and improving market sentiment, according to Hometrack.

Two factors are behind the shortage in supply, said Richard Donnell, director of research at Hometrack. "First is an increase in the number of first-time buyers, who increase demand but add nothing to available supply," he said.

"Second, existing occupiers are looking to identify property they want to buy before putting their homes on the market, which boosts demand ahead of any growth in supply."

The survey showed that the capital is still leading the way when it comes to rising property prices. London registered the strongest growth in June, with prices rising by 0.9 per cent for the second month in a row.

But Hometrack's figures reveal that improved market activity and price rises are spreading beyond London. Prices grew in six out of 10 regions, with East Anglia registered a 0.4 per cent increase while prices in the South-east grew 0.3 per cent.

The north-south divide is still evident in the average time taken to sell a property. In London this is just 4.1 weeks, compared with more than 10 weeks in the Midlands and northern regions.

Jonathan Hopper, managing director of the property search consultancy Garrington, said: "The London property market is an extraordinary microcosm. It has effectively broken free of the rest of the UK and is operating in its own stratosphere."

Mr Donnell added that prices would continue to rise, although growth may be hampered by too-high price expectations from sellers.

"An expansion in supply to ease the pressure on prices looks unlikely, and the short-term direction for the market depends on demand and expectations over the outlook for the market and wider economy," he said.

Discover more property articles at Homes and Property
News
peopleJonathan Ross has got a left-field suggestion to replace Clarkson
News
Andy Davidhazy at the beginning (left) and end (right) of his hike
video
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
Arts and Entertainment
Written protest: Julia Donaldson, author of The Gruffalo, has sent an open letter to the Culture Secretary
books
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
news
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
Property search
Property search
  • Get to the point
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: Practice Accountant - Bournemouth - £38,000

£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped commission: SThree: Does earning a 6 figu...

Recruitment Genius: SEO Executive

£18000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: New Lift Sales Executive - Lift and Elevators

£35000 - £40000 per annum: Recruitment Genius: A challenging opportunity for a...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss