Liquid error: wrong number of arguments (2 for 1) House prices rise, but it's not a bubble, says LMS | Marsh & Parsons Sales and Lettings Estate Agents London

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House prices rise, but it's not a bubble, says LMS

Mon 14 Oct 2013

There is no bubble, figures in the property industry have said, welcoming the latest price rises revealed by the

latest statistical release from the Office for National Statistics (ONS). According to the ONSs August Housing

Price Index released today, in the 12 months to August 2013 UK house prices increased by 3.8%, up from a 3.3%

increase in the 12 months to July 2013. Other headline figures included: ? House price growth remains stable

across most of the UK, although prices in London are increasing faster than the UK average ? The year-on-year

increase reflected growth of 4.1% in England, 1.1% in Northern Ireland and 1.0% in Wales, offset by a fall of

0.7% in Scotland ? In August 2013, the UK HPI surpassed its previous peak in January 2008 (185.5) by 0.3% ?

Annual house price increases in England were driven by London (8.7%), the East Midlands (3.8%) and the West

Midlands (3.5%) ? Excluding London and the South East, UK house prices increased by 2.1% in the 12 months to

August 2013 ? On a seasonally adjusted basis, UK house prices increased by 0.5% between July and August

2013 ? In August 2013, prices paid by first-time buyers were 4.9% higher on average than in August 2012. For

owner-occupiers (existing owners), prices increased by 3.3% for the same period ? The average UK mix-adjusted

house price in August 2013 was 247,000 ? A healthy recovery continues across most parts of the UK with

house prices climbing steadily and passing the previous peak of January 2008. However, prices are still well

below the market highs of 2007, and the recovery in many parts of the UK is relatively muted. Northern Ireland

and Wales saw modest increases, while average values in Scotland actually fell compared to last year, said

Peter Rollings, chief executive of estate agency Marsh & Parsons, responding to the figures. ? The London

property market operates on an entirely different level to the rest of the country. Across the capital, annual price

increases of 9% positively dwarf those in the rest of the UK, and in Prime London this is even higher we have

recorded an 11% increase compared to last year, ? Rather than create a bubble, we may find that Help to Buy

actually stabilises prices by encouraging first-time sellers to put their properties on the market and take their next

step up the property ladder. For the past three quarters, a lack of available property has created an extraordinary

premium for those on the market but we are now seeing a gradual increase in supply. In Prime London, we

recorded a 5% increase in the number of properties available on the market in the last quarter. This meant that

the ratio of supply and demand has begun to stabilise for the first time in a year which can only be good news

for those wanting to buy. ? Andy Knee, chief executive of LMS, said: Although London continues to be a focal

point of activity, experiencing a rate of growth more than double (+8.7%) that of the next best performing region

(Midlands, +3.7%), this should not overshadow the fact that all regions apart from Scotland have witnessed a rise

in the average house price over the past year. These figures show that there is not a bubble, but rather that

there is a national upward trend being experienced by almost everyone.? ? There are several reasons why house

prices are continuing to rise. Not only are mortgage rates currently at their lowest level but high rents and low

returns on savings mean that an increasing number of people are turning to property as a means of investment.

First-time buyers are competing with buy-to-let landlords for a very limited supply of houses. Until more houses

are built and a sense of equilibrium is restored between supply and demand, prices will inevitably continue to

rise.

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