House prices enjoy biggest 'spring bounce' since 2004

The Momentum UK Team 19 March 2012

The property market has seen the highest first quarter rise in house prices for eight years according to a new report.

Typical asking prices reached £239,939 in March up, 1.6% on the previous month, and 4.9% over the first quarter of 2012, the largest such quarter increase since 2004.

According to the Rightmove House Price Index all ten regions in England and Wales recorded a monthly rise in house prices compared to February, but the Midlands, Wales and the Northwest all recorded a year on year drop compared to 2011 figures.  Nevertheless, Miles Shipside, director of Rightmove, said: "Early indicators suggest that property market activity in 2012 is on course to be more robust than in 2011."

The typical asking price in London saw a high of £455,159, up by 7.3% compared to the same time last year. Shipside said:

"The traditionally buoyant spring market has combined with a shortage of supply and brisk turnover of property.

"The result is another new record for average asking prices in the capital this month, representing an increase of nearly £600 a week over the last year and underlining London's continuing property market strength."

Rising demand may have been partly fueled by a rush to beat the end to the stamp duty holiday due at the end of this month. Miles Shipside commented:

"The stamp duty holiday was designed to promote activity in the moribund housing market, helping first time buyers to get onto the housing ladder, and as a consequence releasing others to climb up the rungs too. With some promising indicators of activity so far in 2012, there are finally some signs that this is playing an important role.

"The question is: can the Chancellor afford to spring a surprise and extend the stamp duty exemption? If not, what are the potential costs of leaving the UK re-sale property market without any incentives?"