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UK house prices grow by 3% in first quarter

The annualised average rate of growth now stands at 10.3% while the three and six month annualised rates of growth are 12.17% and 3.73% respectively.

Stuart Law, Chief Executive of Assetz, said:

“The year has got off to a strong start, with a 3% rise in average house prices in the first quarter as an average of all of the main indices. Whilst there were a number of factors driving the market upwards, such as a rush to complete purchases ahead of the stamp duty holiday being withdrawn, there were also a number of negative factors such as rising mortgage rates that failed to quell the rise in transactions. In fact, HMRC figures showed a large surge in completed sales in March, up 17% in a month, as house buying demand continued to grow.

“Mortgage lending was also up 30% month on month in February. Nonetheless we still have the ‘new normal’ level of transactions, only around half of those in 2007, and we have no expectation that transaction levels will reach those peaks again for many, many years as we move towards becoming a rental society in the UK.

“We feel that our estimate of a 3% rise in UK house prices for the whole year of 2012, which was at the top of the range of forecasts, could be comfortably achieved, regardless of the initial version of the GDP figures released today indicating that the economy is falling slightly again.

“The UK buy to let community is still one of the main beneficiaries of this double dip recession, with the overall depressed mortgage market driving the private rented sector onwards and upwards. We continue to see strong demand from both experienced and first time investors looking to buy in this strong market.”

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