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UK home prices keep ticking along

London: Asking prices for homes in Britain rose at the sharpest rate in more than six years over the past 12 months despite a big rise in new listings coming onto the market recently, property website Rightmove said.

Rightmove’s February house price index showed the price of properties coming on to the market in the four weeks to February 8 were 6.9 per cent higher than a year earlier, the biggest increase since November 2007. January’s index showed a 6.3 per cent rise.

“New sellers are now asking over £16,000 (Dh98,170 or $26,600) more than those who came to market a year ago, a rate of increase not seen since before the credit crunch took hold in 2008,” Rightmove director Miles Shipside said.

Britain’s economy has been growing faster than most of its industrialised peers, with the housing market standing out as it benefits from falling unemployment, record low interest rates and government mortgage schemes.

But concerns about the speed of recovery in the market prompted the Bank of England in November to announce it would remove incentives for mortgage lending under its Funding for Lending Scheme. The sector remains supported by the government’s Help to Buy mortgage guarantee programme.

Month-on-month house price inflation — which is not seasonally adjusted — surged to 3.3 per cent in February’s survey from 1 per cent in January. Rightmove said February was typically a strong month for asking prices, and that the latest rise was the second largest for a February since the index began in September 2001.

Housing shortages were pushing up prices despite some signs of extra construction, Rightmove said. “Supply and demand imbalances remain and are getting worse in many markets, as a result of years of under-provision of additional housing stock, especially in the areas where the local economy and employment are strong,” Shipside said.