The data from the LSL house price index also shows that house sales are up 40% year on year, with 72,000 transactions in April alone.
The firm also revealed that sales activity is being fuelled by increases in first time buyers and buy to let landlords and growth is not confined to London and the South East with East Anglia now seeing prices exceeding pre-recession highs.
David Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL Property Services, said that sales in April have returned to more normal levels.
‘Activity is largely being fuelled by increasing numbers of purchases by first time buyers and buy to let landlords, as consumer confidence sweeps the country. Low inflation and healthy wage growth are energizing household finances, and infusing aspiring buyers with greater optimism,’ he pointed out.
He also drew attention to the fact that while London may be forging the way with 13.2% annual house price growth, the rest of the country is definitely seeing growth move out into the regions from the capital city.
The South East has seen annual price growth of 6.1%, the East Midlands 5.3%, the West Midlands 4.4%, the South West 4.2%, the North is up 3.7%, and Yorkshire and Humber up 3.5%. East Anglia has seen prices rise by 2.9% year on year, the North West is up 2.7%, and Wales saw annual growth of 3.5%.
Lincolnshire, Northamptonshire and Nottingham all saw house price inflation above the national average. East Anglia has become the third region following London and the South East where house prices have reached record highs, and have exceeded their pre-recession peak. In a key indicator of the vigour of the recovery, over the last 12 months prices have risen in 89% of the unitary authorities across the country.
‘But supply levels need to keep pace, thus allowing the wheels of the housing market to continue turning. Constrained supply in the capital has already moderated total London sales over the past twelve months,’ said Newnes.
‘Demand shows no sign of slowing. More house building is imperative to keep the momentum going, and to ensure that price rises are sustainable, in particular for first time buyers who remain the key ingredient at the lower end of the market,’ he explained.
‘With the more stringent Mortgage Market Review (MMR) lending conditions now in place, and tighter regulation and stress tests on banks, the borrowing process is slowing, but this isn’t a setback for the market so long as the government encourages a healthy flow of available housing stock,’ he added.
