House prices in the UK increased for the second consecutive month in April, posting gains of 0.1 per cent. London saw the biggest climb at 0.3 per cent, while other regions in the south of England experienced rises of 0.1 per cent. However, the data from Hometrack revealed property values in the Midlands and north of the country were either static or declined last month. The organisation highlighted stronger demand as one of the main drivers behind the price rises, although pointed out this was fuelled in part by the end of the stamp duty holiday for first-time buyers earlier this year.
Richard Donnell, director of research at Hometrack, commented: "Looking at recent years, confidence in the housing market has led to a boost in supply and this is what we are experiencing now. However, the short to medium-term outlook for prices hinges on the outlook for demand." He added the ongoing issues in the eurozone, as well as concerns over the performance of the UK's economy, could lead to more subdued confidence in the market going forward.
The most recent Halifax Housing Market Confidence Tracker published at the end of April revealed homeowners are feeling more upbeat about the prospects for the country's residential real estate sector, with 39 per cent of those questioned expecting property prices to rise rather than fall. People living in the south of the country are more positive than those in northern regions, though, with the organisation noting the gap in sentiment between the north and south of the UK has widened since the beginning of 2012.
Martin Ellis, housing economist at Halifax, commented: "There is [...] a substantial north-south divide to the improvement in housing confidence, which is reflective of property prices in the south currently [being] more resilient than in the north." He concluded that, unless the UK's economy experiences a "pronounced weakening", house prices are likely to remain largely unchanged throughout the remainder of 2012.
- Thursday 03 May 2012