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Demand For London Homes Surge; House Price Gains At 3-Year High

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Properties in London were sold at the fastest pace since 2007 in April, while house price growth across the U.K. and capital city remained at three-year high, a survey by Hometrack revealed Monday.

London homes stayed on the market for an average of 4.6 weeks this month, the least since October 2007, the survey found.

At the same time, demand continued to outpace supply of properties. "In each of the last three months, the growth in supply has failed to keep pace with demand," said Richard Donnell, Hometrack's director of research.

Property prices in the UK rose 0.3 percent month-on-month in April, at the same pace as in March. This was the largest monthly gain since March 2010, according to Hometrack.

In London, prices increased 0.7 percent from a month earlier. This was the strongest price growth recorded in the capital since February 2010.

The government's Help to Buy program as well as the Bank of England's Funding for Lending Scheme are expected to provide more support to the property market in the coming months.

In a survey published earlier this month, Rightmove said British house prices increased for a fourth consecutive month in April. Rightmove also noted that growing demand in the market is not matching the supply of new properties coming up for sale.

The economy dodged a triple-dip recession in the first quarter with the gross domestic product expanding 0.3 percent sequentially, underpinned by an expansion in the service sector.

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