House prices up 8% but growth slows
Tue 20 May 2014
UK house prices continue to rise rapidly but there are signs of easing, with the 8% growth in the year to March slightly lower than February's figure of 9.2%. London continues to outpace the rest of the country, with prices rising 17% over the year, according to latest figures from the Office for National Statistics. On a seasonally adjusted basis, average house prices actually fell 0.5% between February and March. Brian Murphy, head of lending at Mortgage Advice Bureau, said slowing house price growth is welcome news after the dizzying rises of recent months. "Putting London and South East to one side leaves us with a far more measured and controlled upwards trend. "There are signs that the upwards momentum in the housing market is cooling slightly. "As for the mortgage market, with the new affordability rules keeping lenders under a tight rein, decisions to offer credit are being taken with clear heads and a full and honest appraisal of borrowers' finances." Oliver Atkinson, director at urbansalesandlettings.co.uk , said there is a fine line between boom and bubble. "The problem is we only realise we've crossed it after the event." "Despite a limited supply of properties, buyer confidence is back with a vengeance, fuelled by healthy wage growth, improved mortgage availability and government initiatives such as Help to Buy." Excluding London and the South East, UK house prices rose 4.7% in the year to March. Stephen Smith, director, mortgage club and housing, said the figures show a two-speed housing market in the UK. "This highlights the importance of recognising that each area of the UK needs to be supported and stimulated in different ways. The government cannot make decisions for the whole of the country based simply on London's figures." London continues to outshine the rest of the UK, said Peter Rollings, chief executive at Marsh & Parsons. "This growth is being sustained by unwavering demand among UK and international buyers alike, for whom prime. London property is practically a global reserve currency, offering unbeatable capital investment. "The worldwide appeal and desirability of London as a city makes this a unique component part of the market, and it does not speak for the UK as a whole. "We have seen a remarkably busy opening few months of the year, but price rises are steadying now thanks to a resurgence of supply and the recent Mortgage Market Review tightening affordability criteria."