Prices also increasing at highest rate for two years

Demand for housing increased sharply in January, with prices registering a more modest uptick.

An average rise of 26% in enquiries over the four weeks to January 20, compared to the same period last year, is indicated by the latest market data from Hometrack. 

The property market data firm’s monthly index of city prices showed the biggest increase was in the North and Midlands – particularly Sheffield, Leeds and Leicester. However demand also rose further south, in cities including London and Cambridge.

The improving market led to city price inflation running at its highest rate for the past two years, at an average of 3.9%. While growth was still strongest in northern and Scottish cities, Hometrack said the overall figures were bolstered by the modest growth in London.

The figures came as Nationwide released its house price index for January showing prices up 0.5%. This takes the annual rate of house price growth to 1.9%, its highest since November 2018.

Despite much talk of a “Boris bounce” in the housing market since the election, the building society described the rise as modest and said it still forecast a broadly flat housing market in 2020.

Robert Gardner, Nationwide’s chief economist, said recent data painted a mixed picture. Economic growth appeared to grind to a halt at the end of 2019, while business surveys pointed to a pickup at the start of 2020.

“Looking ahead, economic developments will remain the key driver of housing market trends and house prices,” he said. ”Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts, as well as the outlook for global growth.

”Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.” 

Estate agents, however, hailed the data as proof that the decisive general election result was having a big impact on housing market sentiment. Lucy Pendleton, founder director of James Pendleton, said: “Sparks were flying after the election but this month the housing market has ignited, with the Boris bounce providing the match.

“Boris’s emphatic election victory has retrieved the spanner from the works and the housing market is now positively humming.” 

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