NEWS
UK house prices stable over the last 12 months, latest ONS figures suggest
17-10-2012
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House prices remain relatively stable across most of the UK, although prices in London continue to increase, whilst Northern Ireland prices are falling.
The year on year increase reflected growth of 2.1% in England, 0.5% in Scotland and 1.4% in Wales, which were offset by a decline of 12.8% in Northern Ireland.
Annual house price increases in England were driven by a 6.3% rise in London and increases in the South East and West Midlands of 2.4% and 1.2% respectively. Annual house prices decreased by 0.7% in the South West and by 0.5% in both the East Midlands, and Yorkshire and the Humber. Excluding London and the South East, UK house prices were unchanged in the 12 months to August 2012.
Prices of new homes rose by 3% during the 12 months to August 2012, while the price of pre-owned dwellings increased by 1.7% in the same period.
In August 2012, prices paid by first time buyers were 2.9% higher on average than in August 2011. For existing owners prices increased by 1.4% for the same period.
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, pointed out that the influence of Londons more buoyant property market is obscuring the conditions in the wider landscape across the UK.
?Take away London and the South East from the equation and deep down the wider market is far more subdued. While there is still annual growth in house prices in many parts of the UK, this has been slowing in recent months on the back of a sluggish mortgage market, which is holding back the first time buyer market and preventing any meaningful recovery from setting in, he said.
?At the other end of the scale, cash rich buyers are manfully plugging the gap, supporting sales prices, a fact which has a disproportionate bearing on the capitals market. Attention is turning towards the impact of the Funding for Lending scheme, and if new buyers are able to take advantage of cheaper finance this quarter, it could be pivotal in putting a spring in the step of the housing market outside of London and the South East,? he added.
Paul Hunt, managing director of Phoebus Software, believes that it is good news that the housing market remains stable towards the end of the year. Underlying demand is supporting house prices in London and the south east in particular.
Lenders are being innovative in their approach and recent efforts to deliver good value mortgage packages for first time buyers struggling to deal with tight credit conditions and extremely high deposits, are starting to come to fruition,? he said.
The Funding for Lending Scheme has the potential to further boost lending levels over the next three or four months, which would set the housing market in good stead going into 2013,? he added.
