They increased by 0.6% in October which also saw the most transactions for the month since October 2007, according to the latest LSL/Acadata index.
The data also shows that prices have increased 4.3% annually compared to a year ago, setting a new record high and taking the average house price to £237,161. Analysts now predict that prices could end the year up by 5%.
‘We’re only at a fraction of the heights seen before the credit crunch struck, but still the housing market is a hive of activity. There’s been a tremendous jump in transactions over the past three months with the most sales recorded in an October since the onset of the crisis,’ said David Newnes, director of LSL Property Services.
He believes that the key to such a surge in activity is the renewed level of confidence seeping back into the market and a plethora of attractive mortgage deals enticing more and more aspiring buyers back into the housing arena.
‘For the first time in nearly three years, all 10 regions in England and Wales have seen an increase in prices, an astonishing recovery and one that we can now say is truly national. Even earlier this year, many regions were still struggling to escape from the resilient grasp of the financial crisis. But in little over six months we’ve seen a drastic improvement in the availability of mortgages and increased lending by the banks to those at the lower end of the spectrum,’ he explained.
‘The increase in demand, in part fuelled by the second phase of Help to Buy having being brought forward, has driven up average house prices across the country by £1,376 over the past month and £9,776 from a year ago. But despite significant rises, the increased availability and competitiveness of mortgages has also opened the door to a new wave aspiring buyers who had previously been persistently locked out. The stark rise in first time buyer activity in particular has given the speed of recovery an even greater uplift,’ he added.
East Anglia has seen the greatest boost in sales, up by 26% but even the region with the lowest rise in transactions, the West Midlands, falls only shortly behind rising by 22%.
Newnes said that in the face of rises sweeping across the nation, we must ensure that the market doesn’t soar out of reach for those at the bottom of the ladder. ‘Over the next year it’s crucial that the government supports the growth of new house building to meet the growing demand, and prevent properties across the country becoming unaffordable for large portions of the population,’ he pointed out.
‘But lenders too must share some of the load, as they play a pivotal role in reaching the lower end of the housing market and this can help support a continued and more sustainable rate of recovery into 2014 and beyond,’ he added.
The data also shows that over the last 12 months the average house price has increased on 11 occasions, with only May 2013 seeing a minor fall. According to Peter Williams, housing market specialist and chairman of Acadata, historically this is a common enough occurrence. For example, over the period March 1996 to April 2005 there were 110 months in succession in which house prices rose.
‘With the increase in transactions continuing over the next two months, we anticipate that price rises will continue to be supported by shortages in the supply of properties for sale. We therefore anticipate that house price increases will reach an annual average rate of 5% by the end of the year,’ he said.
