U.K. house prices continue to soar as demand tops supply

Persistent shortage of houses pushed property prices drastically up in the UK, particularly in London and the south east, for a third consecutive month in May.

According to online estate agency Rightmove, average asking price for homes on sale rose 3.6 per cent or 9,409 pounds to hit a fresh record high of 272,003 pounds in May. It was the sharpest average monthly increase in residential property prices since April 2002.

Year-on-year, average price of residential property jumped 8.9 per cent in the month under review. Asking prices for property in London jumped to a record high of 592,763 pounds, up 20,000 pounds from the previous month.

In April, average asking price for residential property had jumped 2.6 per cent month-on-month and 7.3 per cent year-on-year.

Miles Shipside, housing market analyst at Rightmove, said, "A late Easter in the heart of the house-hunting season has not only concertinad the traditional hottest home-moving period by several weeks, but also stagnated seller numbers, further stirring up prices in areas of buoyant demand."

Meanwhile, Deputy Prime Minister Nick Clegg has said that the government's "Help to Buy" scheme home could be pared back to tackle overheating housing market. Mr. Clegg's comments followed Bank of England Gov. Mark Carney's recent remark that the central could advise the government on changing the terms of the mortgage help scheme.

Mr. Carney blamed persistent shortage of houses for the drastic jump in prices. House building levels across the UK is still at nearly 75 per cent of its 2007 level.

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