Property price growth in the UK spreading out beyond London, latest ONS data confirms
Tue 14 Jan 2014
In the 12 months to November 2013 UK house prices increased by 5.4%, down slightly from a 5.5% increase in the 12 months to October 2013, the latest data published today (Tuesday 14 January) shows.
The figures from the Office of National Statistics show that the year on year increase reflected growth of 5.6% in England, 5.4% in Wales, 2.5% in Scotland and 3.3% in Northern Ireland. House price growth is beginning to increase strongly across parts of the UK, the ONS reports says although prices in London are increasing at more than double the UK average.
Annual house price increases in England were driven by rises in London of 11.6%, the South East at 4.5% and the West Midlands at 4.4%. Excluding London and the South East, UK house prices increased by 3.1% in the 12 months to November 2013. On a seasonally adjusted basis, average house prices increased by 0.5% between October and November 2013.
In November 2013, prices paid by first time buyers were 6.4% higher on average than in November 2012. For existing owners prices increased by 5.1% for the same period. Experts point out that it is particularly good news that the recovery in the housing market is spreading beyond London.
While London house prices maybe increasing at more than double of those in the rest of the country the fact that regions outside the capital are now playing catch up is highly positive news, said Paul Smith, chief executive officer of Haart estate agents.
Other surveys have shown sentiment to be at a high and yet people are hesitating about putting their homes on the market. This could be that lack of stock means lack of choice but surely now is the time to consider moving as prices outside London are moving at a rate close to 6% year on year, he pointed out.
London is another story with annual rises at 11.6%. But we believe this rate will slow in time and we do not predict a bubble developing in London because growing world demand for property here is as strong as ever and underpins the prime areas. This demand is now spreading out, not only to the London boroughs, but to most the regions which are showing a steady and orderly growth, he added.
According to David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, prices have been moved upwards driven by an increased demand for property, boosting sales in the process.
Confidence has been bolstered among banks and buyers alike showing strong headway has been made on the road to recovery. But its clear we still have some way to go and we are nowhere near getting an unsustainable house price bubble, he explained.
For many climbing the first rung of the property ladder is no small feat, while, despite an improvement in lending conditions, securing a mortgage can be equally challenging. Putting together the much needed deposit has however been made easier with Help to Buy offering a real helping hand, welcoming in a flurry of new first time buyers.
But with Funding for Lending seeing the chop, the spotlight will be on Help to Buy to keep the momentum going as it takes centre stage in the months ahead, he added. However by any measure, it seems that 2014 may well be the year where the recovery really steps up a notch. But to make sure this isnt held back, Its crucial that we address the lack of new home building across the country, he concluded.
Peter Rollings, chief executive officer of Marsh & Parsons believes that the slightly monthly slowdown towards the end of 2013 does not mean that UK houses prices are winding down. 'House price growth has washed across every corner of the UK, and todays figures show that in a third of regions, house prices have surpassed January 2008 levels. The London property market is sailing ahead, with prices rising at more than double the pace of the nationwide average,' he said.
Continued demand for the best properties in the sought after postcodes in prime London will ensure that strong property price growth will rollover into 2014, and we predict house prices to rise by a further 5 to 7% over the course of the next 12 months. This month, we have almost 23 buyers registered for every available property, which will inevitably keep property prices high, but as more property comes onto the market, we expect this to stabilise,' he pointed out.
Stuart Law, chief executive officer of Assetz, predicts that Well established locations in city centres and suburbs, accounting for around 85% of residential property, and where employment is high, will now see strong price growth and this is reflected in these year on year price growth figures of over 5% in England and Wales.
'Risks are diminishing away from London and investors and homeowners are coming to the conclusion that the economy is now recovering. Todays inflation figures dropping back to 2% for the first time in four years will also help boost growing confidence,' he said.
Rents are not keeping up with house prices and this is good news for tenants. Likewise, investors are once again looking for growth and strong gross yields of around 7% or greater, heading to key cities like Manchester, Liverpool, Birmingham and their suburbs where there are excellent opportunities for investment. Southern investors are broadly unaware of the lucrative yields available in northern markets, at prices that have not yet reflected the price growth of the next cycle,' he added.