London continues to buck housing trend

London and the home counties are the only parts of the country showing signs of improvement in the housing market with prices showing little change or even falling in other parts of England and Wales.

The latest survey, from property analysts Hometrack, showed that house prices rose 0.2% but that was largely fuelled by a 0.6% increase in London, while there was a smaller rise in the South East and East Anglia. The company said that it did not expect a noticeable change of fortunes in the coming months, as supply continues to outstrip demand, and the raising of some mortgage rates combines with fears about the Eurozone and the economy in general.

The Hometrack figures did record a 0.4% increase in the number of new buyers registering with estate agents while the amount of properties which were coming onto the market, though slowing down due to the post-Easter period, nevertheless, also showed an increase. In London demand has now outstripped supply for the last three months in a row, but the situation is very different in the rest of the country, notably in the north and in Wales.

Richard Donnell, director of research at Hometrack, said: “Increased mortgage rates and mounting concerns over the impact of the eurozone on the UK's economic growth and employment are likely to keep demand and prices in check as we move into summer.”