UK home prices climb 0.5 percent in December; gains expected to continue in 2014

Nathan Andrada – Fourth Estate Cooperative Contributor

London, England, United Kingdom (4E) – House prices in the UK climbed in December and will continue to rise in 2014, driven by increases in London and southeast England, according to London-based property researcher Hometrack Ltd.

Home values across England and Wales jumped 0.5 percent from November, the Hometrack report showed. In 2013, prices rose 4.4 percent, a reversal from the 0.3 percent decline in the previous year. London and southeast England posted the highest growth, higher by 9.1 percent and 5 percent, respectively. Home prices in northern England dropped 0.5 percent.

In terms of region, house prices increased 0.3 percent in the West Midlands and the south-west, 0.2 percent in Wales, and 0.1 percent in Yorkshire and Humberside and the north-west. East Anglia saw prices rise 0.5 percent, the south-east by 0.7 percent, and London by 1.0 percent.

Prices were driven higher this year by the mismatch between supply and demand, and it is expected to persist in 2014, according to Hometrack. The market is also benefiting from the government’s Help to Buy program, designed to help homebuyers by setting small down payments.

Demand rose 25 percent this year, the fastest pace in three years, while the supply of homes for sale gained 6 percent, the slowest in the 12 years since Hometrack started gathering data.

For 2014, mortgage lender Halifax estimates that home prices will rise between 4 percent and 8 percent.

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