Overall, house price annual inflation was 12.5% in England, 5.8% in Wales, 7.6% in Scotland and 10.9% in Northern Ireland, according to the figures from the Office of National Statistics.
Annual house price increases in England were driven by an annual increase in London of 18.8% and to a lesser extent increases in the East at 13.4% and the South East at 11.6%.
Excluding London and the South East, UK house prices increased by 9.1% in the 12 months to September 2014.
The data also shows that on a seasonally adjusted basis, average house prices increased by 0.5% between August and September 2014.
In September 2014, prices paid by first time buyers were 13.3% higher on average than in September 2013. For existing owners, prices increased by 11.5% for the same period.
According to Peter Rollings, chief executive officer of Marsh & Parsons, the housing market recovery is still showing spritely movement, and good ground has been covered in property values compared to a year ago.
‘Values have retreated back from peak levels in the majority of regions across the country. London remains the spark plug injecting energy into the overall annual rise in UK house prices, and lively demand to live and work in the capital has always spurred growth on at a faster pace than in other regions,’ he said.
‘Following a slower than normal summer in London, an attractive combination of greater supply of property, excellent lending conditions and more realistic asking prices are attracting good amounts of potential buyers to the market,’ he added.
David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that recent hiccups in the market have not shaken the overall underlying stability. ‘Zooming in on the regional footprints unearths a more complex path of growth as the recovery continues to advance with a Southern leaning slant,’ he said.
‘If we omit London and the South East from our calculations, a milder annual change in property prices emerges. Yet at the very top end of the housing market in prime central areas of London, growth is subsiding,’ he added.
He also pointed out that the firm’s research shows that October saw the highest level of house sales completed in a month since November 2007. ‘This increased level of house sale completions marks a considerable, though laborious, reflection of the increased buyer activity earlier in the year since the recession zapped the energy from the market. Not only this, but activity is starting to shift towards areas where the recovery still requires support and attention,’ he explained.
The research also found that the biggest uplift in completions in the third quarter of 2014 compared to 2013 has been witnessed outside of London. Completed house sales in both the West Midlands and East Midlands have risen 22%, while in London house sale completions are up by just 3% over the same period.
‘Further growth in activity is critical to warm up the local recovery. First time buyers in particular need shielding from any future cooling interventions from the government or Bank of England,’ he concluded.
Stuart Law, chief executive officer of Assetz, said the figures shows that the regions are no longer hanging on the coattails of London but showing decent price growth in their own right.
‘The Eastern region of the UK is well ahead of the South East’s 11.6% at 13.4% and the North West and Midlands are also creeping closer. Mortgage availability remains good and with wage growth finally showing an uplift, the traditional seasonal lull in market activity in the run up to Christmas is looking a lot less unnerving,’ he pointed out.
According to Graham Davidson, managing director of Sequre Property Investment, also believes it is good news for the regions. ‘All nine English regions have seen house prices continue to rise. First time buyers are on the rise, thanks to incentives such as Help to Buy beginning to kick in, although new limits to responsible lending mean that the proportion of first time buyers is still inconsistent with the rest of the market,’ he said.
‘Prices for first time buyers have increased by 13.3% over the course of 2014 which is the highest annual increase in prices for first-time buyers since March 2005 and is perhaps a reflection on the continued issue of demand outstripping supply,’ he pointed out.
‘London’s market, whilst still on the up, has begun to slow thanks to policy changes such as the impending introduction of Capital Gains Tax (CGT) for non-UK residents next April which is now dampening the interest from overseas investors,’ he added.
