Earlier this week, Hometrack rereleased its latest housing report, this time covering May. This morning it was Nationwide’s turn. And then finally, we have the latest data from the Land Registry. The big snag with Land Registry figure is that it lags behind most of the other reports. So while Nationwide and Hometrack told us what happened in May, the Land Registry told us about April. The big advantage is that its data is more accurate. So what did the three reports say?
According to Hometrack, house prices rose 0.4 per cent in May, after rising 0.3 per cent in March and April. Richard Donnell, Director of Research at Hometrack, said: "While levels of demand for housing have been increasing each month, the total growth in buyer numbers has been broadly in line with that seen in recent years. But it is a lack of housing to buy that is driving the acceleration in prices. The shortage is being exacerbated by the rate of new stock coming to the market failing to keep pace with the number of sales agreed. Nationally, new supply grew by 2.8% in May while sales agreed were up 8.2%. 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.”
The Nationwide also had house prices rising by 0.4 per cent in May and by 1.1 per cent year on year. Robert Gardner, Nationwide's Chief Economist, said: "A number of factors are likely to be contributing to the pick-up in activity. There has been an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Indeed, mortgage rates have fallen back towards all-time lows in recent months.”
He added: "Progress is likely to be gradual and downside risks remain. While there are signs that economic activity is picking up, there has been some softening in the labour market, with employment growth appearing to run out of steam in the first quarter of the year.”
As for the Land Registry, it recorded a 0.4 per cent month on month rise in house prices in April, and a 0.7 per cent year on year rise. But the headline figures do not tell the full story. In London, the Land Registry had house prices rising 6 per cent year on year, but falling in the North East.
Matthew Pointon, Property Economist at Capital Economics, said: "At the national level house prices seem just about able to grind out marginal gains, but a lot of this is dependent on the strength of the London market. In turn, that continues to rely on overseas capital seeking a safe haven. But clearly there is a risk that at some point these inflows go into reverse. If they do, expect London’s outperformance to come to a rapid end.”
© Investment & Business News 2013