Newspaper article The Journal (Newcastle, England)

Shortage of Homes 'Is Causing Prices to Rise'

Newspaper article The Journal (Newcastle, England)

Shortage of Homes 'Is Causing Prices to Rise'

Article excerpt

Byline: Karen Wilson

ASPATE of property surveys are claiming house prices are on the up, but experts in the region are painting a different picture.

According to figures from the Office for National Statistics, house prices climbed by 2.4% across the North East in the year to February 2013, making the region one of the best-performing in England. It came second only to London, which had the biggest annual increases of 5.9%.

Duncan Young, of Sanderson Young estate agents, said: "We seem to have had a bit of a lag in previous years from other regions in the country and this is mainly us catching up with the other areas.

"However, there are clear signs of an excessive shortage of homes which is another reason why prices will rise more quickly in our area.

"Two homes on the outskirts of Newcastle went to best and final offers last week and both went for over 10% more than their asking prices - it is several years since that has happened."

Justin Anim, managing director of Pattinson estate agency, finds the figures puzzling.

"If you can find an estate agent who says house prices have gone up, I'd be amazed," he said.

"Like the rest of the country, the North East is split into micromarkets.

In the more favoured neighbourhoods, when there's a limited supply, at worst prices are resilient and this could possibly explain that figure.

"However, I don't see that house prices as a whole across the North East have risen."

This week the Council of Mortgage Lenders published a breakdown of its lending figures for February, which showed that 2013 has been the best start to the year for first-time buyers since 2008 as they've consistently accounted for two-fifths of house purchase loans in the past six months.

It is thought that the Government's Funding for Lending scheme launched last August has also helped borrowers with small deposits.

"There are definitely more firsttime buyers around compared to 2008 but that's from a low base," said Mr Anim.

"I'm always suspicious of state intervention into any marketplace, but it would appear that taxpayers are now funding people to buy houses which seems a strange thing to do. …

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