UK house prices up by 8% year on year in March, down slightly from previous month
UK house prices increased by 8% in the year to March 2014, down slightly from February when the annual rise was 9.2%, the latest data from the Office of National Statistics shows.
House prices increased by 8.5% in England, 4.9% in Wales, 0.8% in Scotland and 0.3% in Northern Ireland. The data also shows that house prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth.
Annual house price increases in England were driven by rises in London of17%, the East saw annual growth of 6.6% and the South East 6.1%. Excluding London and the South East, UK house prices increased by 4.7% in the 12 months to March 2014.
However, on a seasonally adjusted basis, average house prices fell by 0.5% between February and March 2014.
In March 2014, prices paid by first time buyers were 10% higher on average than in March 2013 and for existing owners prices increased by 7.2% for the same period.
According to David Newnes, director of Your Move and Reeds Rains owned by LSL Property Services, the UK housing market recovery is radiating out across the country, as prices and activity advance steadily across the regions.
‘The capital is clearly a good market showing the strongest growth. But if we strip out London from the picture, average house prices have risen a sustainable 4.7% over the past year,’ he said.
He pointed out that household finances have seen an upturn in recent months invigorated by healthy wage growth, low inflation and steady rents which are rising slower than CPI inflation.
‘This has bolstered the hopes of aspiring buyers, enabling thousands to save up crucial deposits. First time buyers continue to be the catalyst fuelling growth at the bottom rung of the ladder. Help to Buy may not be necessary in North London and Hampstead, but it’s certainly useful in Hull,’ he explained.
‘However lack of enough new available housing stock is still the primary roadblock to a full property market recovery. Construction may be ramping up the pace, but house building starts are still trailing behind the required levels,’ he explained.
‘The mortgage market has already taken steps to regulate borrowing more closely, and criteria have tightened substantially again. We need to see the full impact of MMR yet but increased supply of new homes would also help to continue to moderate price rises, relieve competition for properties, and sustain activity levels,’ he added.
Peter Rollings, chief executive officer at Marsh & Parsons, said that this growth is being sustained by unwavering demand among UK and international buyers alike. ‘The worldwide appeal and desirability of London as a city makes this a unique component part of the market, and it does not speak for the UK as a whole. If you exclude London from the equation, average UK house prices have risen an orderly 4.7% in the last 12 months, and growth is still just awakening in many parts of the country,’ he commented.
‘The housing market is just that, a market, and by definition will self regulate in time. We have seen a remarkably busy opening few months of the year, but price rises are steadying now thanks to a resurgence of supply and the recent Mortgage Market Review tightening affordability criteria,’ he explained.
‘The first signs of cooling are evident this morning, with average UK house prices down 0.5% from February to March 2014. Excellent capital growth is encouraging sellers and accidental landlords to cash in by put their properties up for sale and outside of London, Help to Buy is freeing up the market at the lower end while inside London, Help to Buy is virtually non-existent. This is going some way to redress the imbalance of supply and demand, and we have seen the ratio of buyers per available property fall from 24 buyers per property in January to around 18 at the end of April. However there are still around 50% fewer properties available than in 2007, so there is still plenty more slack to be taken up,’ he concluded.