Property price growth in the UK beating savings rates, new research suggests

Annual property price growth in the UK is almost six times greater than popular ISA savings products, it is claimed.

The average UK house has increased 11% in value since January 2013 while the best fixed rate ISA paid 1.85%, according to research by Sequence, owners of over 300 estate agent branches across the country.

It also reveals that London’s house prices have increased by 21% annually to £461,477, some 11 times the growth of an ISA interest rate.

London’s sales transactions increase by 20% annually as buyers continue to flock into the market and overall UK transactions remain buoyant coming into the New Year, up 18% annually.

The research also reveals that London now has almost 14 new buyers registering for every new instruction and mortgage availability continues to fuel the market, with the number of applications up 15% annually and the number of first time buyer applications rising by 22%.

‘The property market shows no sign of slowing in the first quarter of 2014 and with the outstanding rates of annual price growth across the market it is easy to see why buyers are keen to get a foothold on the ladder. Indeed new buyer registrations grew by 26% annually in the UK and 28% in London,’ said David Plumtree, chief executive at Sequence.

‘The property price growth we are seeing is out performing all other types of investment and is currently 11 times greater than an ISA in London, so anyone with cash in the bank is understandably looking to capitalise on the rising market,’ he pointed out.

‘Sales transaction levels are rocketing alongside this growth, up 18% annually in the UK and 20% in London. There are now almost eight new buyers registering for every new instruction coming onto the market across the UK, almost 14 in London, and it is this fierce competition which is underpinning the price growth,’ he explained.

‘Lending criteria continues to be very strict with affordability on loans paramount, so a bubble is not being created. However, the supply of new homes remains woefully low and with interest rates now expected to remain at rock bottom until spring 2015, demand will continue to rise, with property prices following suit,’ he added.