UK Sept House Prices Rise Most Since June 2007: Hometrack

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House prices in the UK rose for the second consecutive month in September and to its highest level in two years, the property information company Hometrack said Monday.

The average asking price for a home in England and Wales rose 0.2% month-on-month in September, after a 0.1% growth in the preceding month, marking the fastest monthly growth since June 2007. The average asking prices stood at GBP 156,100 in September.

Annually, house prices dropped 5.6% in September, versus a 6.7% fall in August. The latest decline is the smallest in a year. Hometrack said a lack of housing for sale was providing support for prices, while the talk of a general improvement in property and equities was leading to increased market confidence.

Among the regions, London and the South East showed the maximum rise in prices. House prices climbed 0.4% in London and were up 0.3% in the South East. Hometrack attributed the rise in prices to a shortage of quality homes on sale. Prices rose in 15% of the postcodes in September, but they remained unchanged in 84% of the regions.

On September 21, property website Rightmove said house prices rose 0.6% on a monthly basis in September, reflecting rising confidence and a decrease in the stock of properties. This came after a 2.2% fall in August.

The Building Societies Association revealed earlier last month that cautious optimism was prevailing in the housing market, with lesser people saying access to mortgage was a barrier to property and more number saying it was a good time to buy. At the same time, a report by the Ernst & Young Item Club warned that the recent stabilizations in the market was a false dawn, with prices rising mainly due to lack of properties available for sale.

A report British Bankers' Association showed last month that mortgage approvals for house purchase by UK banks fell for the first time in eight months in August, to 38,095 from 38,186 granted in the previous month. Meanwhile, house prices details for September from Nationwide are due later this week. Economists expect the Nationwide survey to show a 0.9% monthly rise in house prices, but a 0.1% decline on a yearly basis.

Economists and policymakers are of the view that the UK will have a slow recovery, with many risks in the process. The Bank of England's Kate Barker warned last month that there was a risk that the pace of UK recovery could falter, with output likely to remain uneven in the coming quarters. The BoE's Spencer Dale voiced a similar concern when he said the economic recovery could be slow and protracted, as unemployment continues to rise and firms face sluggish demand. Moreover, the Confederation of the British Industries said the constraints on demands could make recovery fragile next year.

In its latest forecast, the CBI said the UK economy could grow 0.9% next year, after contracting 4.3% this year.

House prices in the UK rose for the second consecutive month in September and to its highest level in two years, the property information company Hometrack said Monday. (Market News Provided by RTTNews)