Buoyant start to 2014 as house price boom continues
Wed 01 Jan 2014
The property market welcomed in the New Year with a fresh set of figures showing prices rose 3.2% over 12 months and nearly 11% in booming London.
After a sharp 1.8% rise in November, the average London home now costs 396,646, according to Land Registry figures, the final set of housing market data published in 2013.
The South East, West Midlands, Wales and East all recorded property growth of more than 3% in the year to November, lifting the average price in England and Wales to 165,411. The recovery remains patchy, however, with the average price in the North East falling 1.6% over the year to just 96,227. The figures also showed a 60% rise in the number of 1 million properties sold in England and Wales, with 1,020 sales in September 2013, up from 639 one year earlier.
Peter Rollings, chief executive of Marsh & Parsons, said: "2013 certainly ends on a high, with house prices continuing their steady ascent, after a strong year of slowly rising property values. "The past 12 months have seen a revival in market confidence, along with a new influx of first-time buyers, buoyed by record low interest rates, and the Help to Buy scheme which has eased lending conditions. "But looking at the wider picture, the recovery is still patchy across the country, with an annual price fall in the North East reminding us that we still have a long way to go." In exclusive prime London, low supply and fierce demand is distorting prices and pushing half of all homes above 1 million, Rollings said.
"This rate of growth is unlikely to slow down as we move into 2014, but after a strong start to the New Year we expect prices to stabilise to a more orderly annual rise of 5% to 7% over the next 12 months." Mark Harris, chief executive of mortgage broker SPF Private Clients, said easing mortgage availability is helping more buyers realise their property-ownership dream.
"This surge in demand is pushing up prices, particularly in London, where supply is already limited."Gazumping and sealed bids are becoming commonplace as relatively ordinary properties fetch a premium. Many buyers are worried that if they don't take the plunge now, they will be priced out further. "Fears are growing of an interest rate rise sooner rather than later but borrowers should not panic. There are still plenty of rock-bottom mortgage deals available, with some particularly good pricing on five-year fixed rates." Stephen Smith, director of Legal & General Network, said the housing recovery is gaining momentum. "Much of this growth is being driven by London and the South East and there is more to be done to ensure a consistent recovery across the whole country.
"As well as helping those with smaller deposits with the Help to Buy scheme we would also urge the Government to look at reducing the burden of stamp duty for those looking to buy a house. "Greater innovation in mortgage products would also help to boost the market in all parts of the country."
Matthew Turner, director of UK buying agents Astute Property Search, welcomed an increase in monthly transactions. "This is due to ever-increasing confidence among buyers, a result of an improving economy, the excellent mortgage rates available and the more reasonable criteria of the lenders." He predicted further price growth this year. "I am now seeing many more long-term tenants move into ownership and this is a trend that I expect to gain momentum during 2014. "Rents have become simply too inflated and more and more tenants are aware that, by buying, they can reduce their outgoings and own their own homes.
"Even though interest rates can only now go up, I expect the pace with which they rise to be gradual and proportionate and, for a few years at least, rates will still be very low historically. Therefore the property market can continue to grow."