UK house prices increase is highest for five years

According to statistics, London and the South East are the main drivers of UK house price increase.

13:58 27 May 2013

UK house prices are at their highest in a single month for the last six years in May according to statistics. Main drivers for growth are the South East and London.

Based on the figures from property analysts Hometrack, house prices in London increased by 0.9per cent, while the rest of the South East rose by 0.5per cent. Prices across the country increased by 0.1per cent making the national average 0.4per cent. This is believed to be the highest monthly jump since May 2007.

Analysts and real estate agents reportedly agree that although the government’s Help to Buy scheme helped improve the sentiment, the main reason for the house price increase was due to increasing demand because of strengthening economy and improving mortgage availability.

Based on the data collected, the demand for houses has increased by 15per cent. On the other hand, supply went down by 0.6per cent. The same thing can be said for the rest of the country, although not to the same extent.

Hometrack's Richard Donnell said, as reported by the Financial Times: "The impetus for rising house prices is originating almost exclusively from London and the South East. Elsewhere, housing market conditions are improving gradually."