House Prices Continue to Rise

Thursday, May 27 2004 Hometrack has reported a 0.6% increase in the average house price during May, and that upward pressure in the housing market indicates that prices will stay strong for the rest of the year. According to Hometrack's figures, no counties experienced house price falls this month, and Cumbria yet again heads the house price rise league table, with average prices rising by 1.5% in May. Other counties to have performed well this month are Lancashire (1.3%), South Lincolnshire (1.3%) and Northumberland (1.1%). London's price rise of 0.7% lifted the capital's average house price to above £250,000 for the first time. According to John Wriglesworth, Hometrack's Housing Economist, the continued rises are due to the unlikely prospect of further interest rate increases and the amount of special offers on the mortgage lending market. Other market symptoms are also showing that prices look set to continue to rise. According to Hometrack, demand is still outstripping supply, with many more buyers than sellers, placing further upward pressure on prices. However, Hometrack still predicts the market to slow during 2005. Mr. Wriglesworth said: 'While we predict house prices to rise by 8% this year, we are now expecting house price inflation to slow down to 4% in 2005. While the current housing boom will come to an end, we see no prospects of a housing market crash.'