Crisis in Cyprus ‘to lift house prices’

The 0.3 per cent rise was driven by a boost to London house prices, with concerns over the crisis in Cyprus and the eurozone likely to send more cash flowing into the English capital in the coming months, the study said.

The national increase in house prices this month marks the highest growth seen since March 2010. Prices soared by 0.7 per cent month-on-month in London, showing the strongest uplift since February 2010.

Three-fifths of London postcodes saw prices increase in March and London properties now spend just under five weeks on the market before they are snapped up – the shortest average time period seen since October 2007.

London has enjoyed strong demand from wealthy overseas buyers who see the capital as a “safe haven” from the troubles of the eurozone.

Richard Donnell, director of research at Hometrack, said that the latest crisis in Cyprus “will only serve to further boost the flow of international funds into the capital”.

Across the rest of England and Wales, prices rose in a fifth of postcodes, the highest share in three years.

The report is the latest in a string of studies which have pointed to Government efforts to unblock the housing market having an impact.

Lenders and estate agents
have been reporting uplifts in
activity, mortgage availability
has increased sharply and loan rates have been slashed since the Government launched its
Funding for Lending scheme (FLS).

House prices are likely to be bolstered further by a multibillion-pound scheme called Help to Buy, which was announced in last week’s Budget.