UK House Prices Situation: Market continues to be tight and strong

UK House Prices Forecast: Rate of growth likely to decrease in most areas

An analysis of house price-related news this week reveals some contradictory reports of price fluctuations and a strong underlying theme of limited supply and strong ongoing buyer demand.

Buyer Confidence Improving?

Propertyfinder.com's monthly report for March suggests that UK home buyers are starting to regain some of the confidence they lost after January's shock rate rise. The report shows that 81.9 per cent of Britons expect house prices to rise over the next year – up from 77.8 per cent in February.

The expected growth rate has also increased, with those surveyed expecting an average of 6.4 per cent house price growth over the next year, up from 5.9 per cent in February.

Rightmove Paints A Rosy Picture

Rightmove's latest survey shows that the average rate of house price growth increased in March to a new annual rate of 12.2 per cent – up from 11.5 per cent in February. This equates to a 1.5 per cent increase on the month, and brings the average price of a home in England and Wales to £228,183.

One of the fastest growth areas was the north of England, with a new average price of £155,000.

NAEA Suggests Market May Be Shrinking

A new survey by NAEA (National Association of Estate Agents) provides a rather more restrained picture of the housing market than Rightmove's survey. Data gathered from its members shows that the average house price has actually fallen slightly this year, from £217,955 in January to £213,259 in February.

The number of new buyers registering with agents dropped by 6 per cent in February, and the average number of houses each agency had for sale was 13.6 per cent lower than in January 2007, and 11.6 per cent lower than in February 2006.

On the positive side, the number of completed sales each month has remained steady from January.

In a separate report, RICS (Royal Institute of Chartered Surveyors) reported that there are presently around 108,000 homes for sale in the UK. In comparison, there were 225,000 homes for sale in February 2003.