House price annual inflation was 12% in England, 7.4% in Wales, 7.6% in Scotland and 4.5% in Northern Ireland.
The index report says that overall house prices are increasing strongly across the UK, with prices in London again showing the highest growth.
Annual house price increases in England were driven by an annual increase in London of 19.1% and to a lesser extent increases in the South East at 12.2% and the East at 10.6%.
Excluding London and the South East, UK house prices increased by 7.9% in the 12 months to July 2014 and on a seasonally adjusted basis, average house prices increased by 1.6% between June and July 2014.
In July 2014, prices paid by first time buyers were 13.5% higher on average than in July 2013. For owner occupiers prices increased by 10.9% for the same period.
The mix adjusted house price index reached a record level of 206.6, some 2.7% higher than June 2014 when it reached 201.2, and 11.4% higher than the pre financial crisis peak of 185.5 in January 2008.
David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that while what’s happening in London may be eye-catching, it is like looking through a kaleidoscope and skews any view of the current total housing landscape.
‘Peeling back the regional layers gives a much more informed view of the core reality of the current market. According to our own research, house price growth slowed across all regions except for London, the South East and East Anglia in July. While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth,’ he explained.
‘Most recently we’re seeing asking prices in the capital start to be reined in, which will apply the brakes on annual house price inflation as the market steadies. With evidence of London starting to cool off after strong growth earlier in the year, it is critical that the underlying momentum that has stimulated much needed increased volume in the rest of the market is allowed freedom to keep moving, whilst any price rises are kept steady and under control,’ said Newnes.
‘Further afield, it is critical that support mechanisms like Help to Buy aren’t dismantled. Compared to the nadir of 2008/2012, activity in the housing market has improved, but is not completely out of the woods yet, and still needs to recapture some of the vitality of its pre-recession health,’ he concluded.
Peter Rollings, chief executive officer of Marsh & Parsons, believes that the market is returning to business as usual. 'UK house price growth is persevering with its upward climb, but the stride is steadying with prices rising an orderly 1.6% in the month to July 2014. However, London remains the snag in the fabric of the nationwide property market, showing an annual increase of 19.1%. As an international nerve centre for employment, finance and culture, the city is cut from a different cloth and is engulfed by more powerful demand for homes, which has always pushed price inflation to the next level,' he said.
'Yet the market is returning to business as usual. This is a welcome boost to consumer confidence, as more natural trading conditions kick in and greater supply soothes both competition and price rises. Buying your first property or trading up is less disheartening than it was a few months ago, and the added choice available at buyers’ fingertips will ensure sales climb comfortably for the rest of 2014,' he added.
According to Andrew Bridges, managing director of specialist London estate agents Stirling Ackroyd, it is what’s driving such a revolutionary pace of change that’s the real news. 'In total, London property is now worth £1.5 trillion, or almost four times as much as all the residential property in Scotland combined,' he pointed out.
'In fact it’s been the East End of London driving the fastest property growth. The West End isn’t exactly a tragic investment, with prices up 13% per year, but that’s well below today’s figures and far off Hackney’s annual growth of 23%. Our findings show Hackney and Shoreditch house prices growing by over 850% since 1987. We’ve seen London transform itself in recent years to be the cultural and financial hub of the world, and with it has come high demand for property,' he explained.
'Delving deeper into London’s property market reveals the true reason behind the city’s sustained growth and it’s about jobs. From fresh start-ups to likes of Amazon’s brand new headquarters, new industries aren’t just leading London, or even the country, they’re leading the world. The Olympics showed the world the true potential of East London, and now Silicon Roundabout is demonstrating its value as a new focal point for this city. With no end in sight for the East’s regeneration, we anticipate London’s property value to soar further as more flock to newly found parts of the city,' he added.
