House prices up 5.2% annually

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The LSL Property Services/Acadata house price index for January 2014 has revealed that the average price of a home in England & Wales at £241,101, another new record.

The average price has thus increased by £1,384, or 0.6%, during January 2014. Prices have now risen continuously for the last 17 months (leaving aside May 2013 where a minor £70 fall was recorded), although the monthly increases have been relatively small at between 0.0% and 0.8% per month over this period.

On an annual basis house prices have risen by a nominal £12,000, or 5.2%. This percentage increase is 2.5% above December’s 12 month RPI of 2.7%, and Acadata said all the evidence from the Office for Budget Responsibility (OBR) and elsewhere suggests that house prices will continue to remain ahead of inflation in 2014.

David Brown, commercial director of LSL Property Services, said: “The UK housing market is roaring back to life in 2014 as the recovery continues across the board. Prices are now up 5.2% annually, driving the price for the average home to a new high. Mostly this is due to much increased activity, with growing demand for property buoyed by low interest rates and Help to Buy, combined with hot competition for homes. This boost in sales has seen an air of optimism encapsulate the market. While 2013 was a turning point in the recovery, 2014 is set to be a watershed year if the next few months continue in the same vein.

“Last month saw the largest rise in sales over the past year, up 67% annually, with transaction levels crucially only 4% below the January average seen in the decade before the credit crunch. This astounding turnaround can largely be attributed to the resurgence of the first-time buyer. The wide range of attractive mortgage deals on offer, cheaper rates and wider product choice has been pivotal. Such rises in new buyer numbers has encouraged activity further up the ladder and inspired movement among second steppers, which will prove vital in sustaining a healthy rate of sales activity.

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