Divide in housing markets continues to grow

House prices

House prices rose by 0.1% in April, down on the 0.2% rise recorded in March, according to Hometrack.

The firm reported that is sees a “clear divide” continuing to grow between markets in and around London and the rest of the country.

It found that the strongest price rises in April were in London (+0.3%), with small gains (+0.1%) across the regions of southern England. Prices elsewhere were either static or falling.

The time on the market has fallen slightly across all regions in the last quarter but still stands at less than six weeks in London and around 12 weeks across all regions away from the south.

Hometrack said the impetus for price rises over the last two months has been higher demand. New buyer registrations over the last three months have grown almost 25%. The usual seasonal uplift in demand together with the added impetus from the recent stamp duty holiday have generated the uplift in recent market activity.

But the impact of these short term drivers of housing demand is starting to dissipate. New buyer registrations grew by just 2.1% over April, half the level recorded in March (4.4%).

Supply grew by 4.8% in April, up from 3.6% increase in March – in the last three months supply has grown by almost 19%. This follows a similar pattern to previous years when an improvement in demand and sales led to more properties coming to the market.

Hometrack warned that if April’s slowdown in demand and rising supply continues over the coming months, it will have an impact on price changes.

Richard Donnell, director of research at Hometrack, said: “House prices rose for the second month in a row in April, growing by 0.1%, down from the 0.2% increase registered in March. The leading indicators from the survey continue to point to a divide between markets in and close to London and those further afield.

“The strongest price rises over the month were recorded in London (+0.3%), with small gains (+0.1%) across the regions of southern England. Elsewhere house prices were either static or falling.

“This profile of price growth correlates closely with the time on the market indicator – a barometer of the relative strength of the housing market. During April the average time on the market was less than six weeks in London, but around 12 weeks across all regions away from the south.

“While the time to sell has fallen slightly across all areas in the last quarter, off an upturn in demand, the relative position of the time to sell between regions has remained broadly unchanged for the last three years.”