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UK house prices increased by 11.7% in the year to July 2014, up from 10.2% in the year to June 2014, according to the latest figures from the Office of National Statistics. 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… Continue reading →

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