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House prices in England and Wales rose 4.4% in 2013 and more than 9% in London to round off a buoyant year for the housing market.

Demand for housing leapt 25%, its fastest rate for three years, while the supply of homes for sale increased by just 6%, the lowest on record.

Three-quarters of the country saw prices rise across the year, against just 20% in 2012, according to the survey from Hometrack.

Growth of 4.4% across the year followed a 0.3% drop in 2012.

Despite December's seasonal fall in demand, house price momentum continued with average prices up 0.5% over the month.

Demand was driven by low mortgage rates, pent-up demand and more positive news on the economy.

2013 got off to a strong start but the launch of the Help to Buy scheme was the catalyst for sustained growth in demand over the second half of 2013, Hometrack said.

London and the South East registered the highest growth in 2013, up 9.1% and 5% respectively. All other regions registered below average growth with prices in the North falling by 0.5% over 2013.

Hometrack director of research Richard Donnell said: "The outlook for the market in 2014 depends on three key factors. Whether the increase in demand can be sustained, whether the strength of growth in the London market can be sustained and the outlook for mortgage rates.

"We expect the momentum in house price growth to spill over into 2014 supported by a continued lack of supply and rising demand.  

"The strongest market conditions and impetus for price inflation is set to remain focused on southern England in 2014. A broader based recovery in the housing market is dependent upon growth in the real economy, jobs and household incomes."

Stephen Smith, director of Legal & General Network, said the data will fuel speculation that prices may be rising too quickly.

"However, it’s worth remembering what the market looked like before government stimulus. It is also worth remembering that Help to Buy is a temporary measure.

"Mark Carney has already said he will review it very carefully to make sure the market isn’t overheating. 

"The main long term problem is the chronic lack of suitable housing. This constrained supply is the main issue to solve if we are to ensure a stable, balanced and sustainable UK housing market in the future.”


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    Absolute rubbish. House prices in wales have not moved a damm digit since 2008. So called experts they seem to be everywhere.

    • 31 December 2013 00:40 AM
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