UK house prices rose to a two-year high in September as demand picked up in London and the property market showed signs of peaking, according to research company Acadametrics Ltd. and LSL Property Services Plc.
The average price of a home in England and Wales rose 0.2 percent from August to £223,965, the highest since July 2008, the companies said. Values were up seven percent from last year.
Imminent public-spending cuts will inevitably hit household finances, but the housing market will not face a ‘double dip’, LSL said. It added it does not expect market activity or house prices to continue growing in the short term.
This increase in house prices came as the number of transactions rose 3.4 percent from August to about 66,000, an increase of 11 percent from a year earlier.
With transactions historically slow in September, this welcome increase in activity, particularly in London, is the result of sustained investment from foreign investors and cash-rich buyers triggering an increase in transactions.
Interestingly, the International Monetary Fund said this week that UK house prices appear high and may need correcting. Similarly, Lloyds Banking Group Plc’s Halifax unit said home values dropped the most since 1983 last month.
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