House prices ‘flatline’ across region despite Southern boom

HOUSE prices in Yorkshire and the Humber remained flat in May, despite the strongest increase in a single month nationally for six years.

Prices rose by 0.4 per cent this month, marking the strongest uplift since May 2007, with the drive coming “almost exclusively from London and the South East”, property analyst Hometrack said.

House prices in London and the South East increased by 0.9 per cent and 0.5 per cent respectively month-on-month, while they rose more gradually with an average 0.1 per cent uplift across the rest of the country by the same measure.

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Prices edged up month-on-month by 0.3 per cent in East Anglia, by 0.2 per cent in the South West and by 0.1 per cent in the Midlands. But they were flat month-on-month in Yorkshire and the Humber, the North East, the North West, and Wales.

Lenders and surveyors reported signs of activity lifting in the housing market following the launch of several Government schemes such as Funding for Lending which have given people better access to mortgages and lower rates.

But Hometrack said the main reason for the price increases is a lack of housing for sale as home owners remain cautious due to the tough economic environment.

It said the signs of an improved market for sellers could spell more “unrealistic” sellers coming to market in the next few months with inflated prices, which would lead to a sales dip.

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Evidence that sellers are finding it easier to stand firm on their prices was shown by the percentage of the asking price which was achieved, which was nearly 94 per cent on average this month. This marked the highest percentage since July 2010.

Sellers in Yorkshire and the Humber were getting 93.4 per cent of their asking price.

Across England and Wales, the volume of homes coming onto the market grew by 2.8 per cent in May, but this was outstripped by an 8.2 per cent increase in sales being agreed.

Prices in London are being pushed up by a gap between supply and demand which is at its widest in the English capital since spring 2009.

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Demand from buyers in London grew by 15 per cent over the last six months, while the supply of homes coming up for sale has dipped by 0.6 per cent.

The survey regularly asks estate agents and surveyors across England and Wales about achievable selling prices.

Richard Donnell, director of research at Hometrack, said: “It is a lack of housing to buy that is driving the acceleration in prices.

“Respondents to the survey reported a lack of housing for sale as one of their greatest concerns in the market at present with one reporting the lowest levels of stock for 15 years.”

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Mr Donnell said high moving costs, uncertainty over the outlook for jobs and a lack of available housing to move to, means home owners are still reluctant to put their own properties on the market.

He said: “Talk of improving market conditions is likely to result in more marginal sellers entering the market in the coming months.

“The danger is that the pressure to secure instructions will lead to properties being put on the market at unrealistically high prices. This in turn will result in fewer sales and a period of price re-alignment.”

But there was better news for the North in a separate survey on prices in seaside towns, which showed faster rises in Northern England and Wales than those in the South over the last decade.

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Prices in Cleethorpes were among the “top 10” fastest rising in the country over the last 10 years, while houses in Withernsea remain among the cheapest.

Prices in Cleethorpes rose by 102 per cent since 2003 to an average of £118,077.

Porthmadog in North Wales was named by Halifax as the seaside town with the biggest percentage increase in house prices since 2003. It saw a 134 per cent uplift, taking them to around £162,638.

Withernsea in East Yorkshire was the second least expensive seaside town, with an average price of £93,671.