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House prices rise for second month in a row
However, with demand expected to slow and supply rising, prices are likely to flatten as we move into summer, warns Hometrack.
House prices rose by 0.1% in April, according to new figures.
This is less than the 0.2% rise recorded in March, but it's still the second month in a row that prices have increased.
However, ‘a clear divide’ continues to grow between London and the rest of the country, according to property website Hometrack.
At 0.3%, London saw the biggest increase in prices, followed by the South East and West and East Anglia with price rises of 0.1%. Elsewhere prices were either static or falling, with the North East and North West reporting the largest decline of 0.2%.
The recent price rises are a result of higher demand, explained Hometrack.
Over the past three months new buyer registrations have increased by almost 25%, helped by the rush to beat the stamp duty holiday deadline last month and the fact that it is the spring buying season.
However, Richard Donnell, director of research at Hometrack, warned that impact of these short-term drivers of demand is now starting to dissipate, with new buyer registrations in April down by half compared with March.
Supply, on the other hand, is rising, with the number of new properties coming onto the market up 4.8% compared with a 3.6% increase in March.
‘If April’s slowdown in demand and rising supply continues over the coming months, we will begin to see a reduction in the upward pressure on price,’ said Donnell.
Conflicting reports over the strength of the economy and renewed eurozone fears are also likely to impact buyer confidence and cause prices to flatten as we move into summer, Donnell added.
Earlier this month property website Rightmove reported that prices increased 2.9% this month – pushing the average asking price in England and Wales to an all-time high of £243,737.
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