Bucking the trend of other indices, the North East is leading the way, up 6 per cent over the past six months.

Asking prices for prime properties across the UK have increased by nearly 3 per cent since the start of the year, according to the latest prime index from the property portal PrimeLocation.com. Average prices for the top quarter of the market grew by 2.9 per cent between January and June, pushing them up by £13,000, from £454,276 to £467,310. Most of the increase came in the past three months. Prices have risen by £478 in January to March to £12,555 over the past quarter. Bucking the trend of other indices, the North East is leading the way, up 6 per cent over the past six months, with average asking prices rising from £304,810 to £326,128.

Close behind is the South East, up £580,880 from £551,105, and Scotland, up £402,754 from £384,385. London prices have increased in line with the national average of 2.9 per cent, rising from £1,118,646 to £1,150,675.

Why the surge in prices in the second quarter of the year?

Nigel Lewis, a property analyst at Primelocation, says increased demand from overseas buyers and low interest rates played a big part: “Sterling’s weak performance against the euro and many other currencies over the first half of the year has continued to make the UK a very attractive market to foreign buyers. The prospect of interest rates rising has also diminished, meaning the cost of mortgages will remain low for those who can afford it.”

But what about the rest of the market?

According to Chesterton Humberts’ Poll of Polls, house prices rose by 0.3 per cent over the month to June. The survey of the leading house price indices reports that this is the first significant increase in 11 months and “indicative of the stabilisation of house prices currently taking place across the country”. But italso highlights the widening gap in the rate of recovery at the top and bottom half of the market. Average prices in the top 20 per cent of the market rose by 0.1 per cent over the past month, up 3.4 per cent over the past year. Those in the bottom 20 per cent fell by 0.4 per cent, down 4.7 per cent over the past year.

Douglas McWilliams, the chief executive of Centre for Economics and Business Research, comments: “The housing market has performed relatively well over the past month, given that the royal wedding bank holiday weekends reduced the number of homes coming onto the market and kept sales pinned down. Buyer interest has held firm, which is down to a more optimistic view of the future as a result of improvements in the economy, supported by low interest rates. But there is still a two-speed recovery in prices, with houses at the bottom end of the market still seeing sizeable falls.”

Source- Thetimes.co.uk