The number of buyers registering with agents increased for the second month in a row, growing by 4.2% over March. This is a slower increase compared to the strong seasonal pick up seen in February, but it is consistent with the level of growth seen over the same month in previous years.
The volume of sales agreed grew by 12.6% over March following a 25.4% increase in February. However, this figure comes off a low base. Adverse weather and the seasonal slowdown which characterised December and January resulted in low levels of sales agreed.
Despite increased demand and rising sales volumes, average prices fell by 0.1% over March. The average price of a property is now £153,100. The year on year growth rate stands at -3.2%.
Prices were down across 27% of the country in March while 8% of the country posted price rises. London registered the first monthly increase in prices for 8 months on the back of rising demand and dwindling supply. Central London was the primary driver of a 0.2% increase in prices across the capital.
Across all other regions prices moved lower by between 0.1% and 0.3%. House prices in the South West were unchanged. The time on the market stands at 9.9 weeks but in three regions the average is over 3 months. In two other regions it is just under 3 months.
Rising sales volumes have led to a firming in underlying pricing levels with the proportion of the asking price rising from 91.9% in January to 92.7% in March. Despite this improvement the proportion of the asking price achieved is still down on the level seen 12 months ago (94%).
The supply of housing continues to grow on the back of improved levels of market activity. Listings were up 5.2% in March - greater than the growth in demand over the month. Continued expansion on new supply over the coming months could put pricing under further pressure.
Richard Donnell Director of Research at Hometrack, the property analytics business, said:
“Hometrack’s latest survey of over 5,000 agents and surveyors across the country reveals that London recorded the first monthly price rise of any region over the last 8 months. Prices in the capital moved 0.2% higher on the back of a 25% increase in demand (over a 2 month period) and tightening supply.
"Central London saw some of the highest price rises with a 1% increase over the month. In contrast East London registered a -0.2% fall in prices, reflecting the highly polarised nature of the housing market across relatively small geographies.
"Away from central London pricing levels remain under downward pressure. Overall average prices moved 0.1% lower over March, a figure flattered by the relative strength of the London market. The survey recorded price falls across all regions in March with the exception of the South West where prices remained unchanged.
"The modest improvement in market sentiment over the last 2 months - albeit largely confined to southern England - is largely a result of increased sales volumes. The survey shows that the number of housing sales agreed has risen by 38% over the last 2 months.
"This increase is off a low base. For example provisional data from HMRC shows that non-seasonally adjusted residential transactions were down 30% in January compared to December.
"That said rising sales volumes show that demand exists and that pricing levels are at a level where transactions can take place – this was not the case over the final half of 2010. The time on the market indicator provides the best insight into the true health of the housing market. While the time on the market has fallen recently a regional analysis provides a more somber assessment of how the market is faring
"Across three areas East Midlands, Yorkshire and Humberside and Wales the average time on the market is over 3 months and in 2 others (North and North West) it is within touching distance of the 3 month mark (11.7 weeks). Across London the indicator is at half the level seen in the northern regions, while the average time to sell in the South East is just under 2 months. In Central London the time on the market is just 5 weeks.
"Linked to extended sales periods, the proportion of the asking price being achieve suggests that underlying pricing levels remain weaker than a year ago. The measure fell over the final half of 2010 from 94% to 91.9% as demand cooled and prices adjusted down to a level where transactions could take place.
"Over the last 2 months it has bounced back to stand at 92.7%, but remains well down compared to this time last year when it stood at 94%. The same pattern is true on a regional basis.
"Looking ahead, the prospects for the market are dependent upon the recent sales momentum being maintained and levels of demand holding up. Predicting short term fluctuations in demand for housing is notoriously difficult but the key risks revolve around interest rates, unemployment and income growth.
"It is clear from numerous surveys that consumer demand remains weak and in housing terms this is highlighted by the extended time to sell data in many regions.
"On the supply side, good news stories may be encouraging an increase in the supply of homes for sale - listings were up 5.2% in March following a 7.5% increase in February. If this trend were to continue, then the balance of supply and demand would shift back, putting prices under pressure once again.
"Such rapid fluctuations in the housing market are indicative of a low transaction environment. Looking ahead the key question is whether the market will continue to see increased demand for housing against the wider economic and fiscal backdrop. The market will remain highly polarised with pockets of strong activity alongside weaker areas.
"Overall we expect headline prices to continue to track lower over the coming
