Slight easing in house price growth in the UK in June, ONS data reveals
Mon 18 Aug 2014
UK house prices increased by 10.2% in the year to June 2014, down from 10.4% in the year to May 2014, the latest official figures show.
House price annual inflation was 10.7% in England, 3.5% in Wales, 6% in Scotland and 4.9% in Northern Ireland, the data from the Office of National Statistics shows. Overall the figures show that house prices have been increasing strongly across most parts of the UK, with pricesin London again showing the highest growth at 19.3%. In the South East prices were up 9.7% and in the East of England up 7.9%.
However, excluding London and the South East, UK house prices increased by 6.3% in the 12 months to June 2014 and on a seasonally adjusted basis, average house prices increased by 0.5% between May and June 2014. The data also shows that in June prices paid by first-time buyers were 12% higher on average than in June 2013 and for existing owners prices increased by 9.5% for the same period.
The market is moving from strength to strength with widespread recovery apparent across the country and house price growth advancing in a steady, healthy direction, according to Peter Rollings, chief executive officer of Marsh & Parsons.London remains at the top, driving national house price increases, demonstrating its exceptional appeal as a place to live and invest for both domestic and foreign buyers, he said.Furthermore, the upturn in the market has boosted consumer confidence, encouraging sellers to put their homes on the market, resulting in a fresh influx of available properties for sale. This is good news for the London property market as it continues its strong, sustainable recovery, he added.
However, David Newnes, director of Reeds Rains and Your Move estate agents owned by LSL Property Services, believes that behind the scenes house price growth is more moderate and sustainable beyond London and the South East. These two weighty regions distort the story and are not representative of the wider UK housing market and therefore should not disorient overarching government policy. Prices actually dropped in seven regions across England and Wales in June. This return to a more natural state of affairs indicates a stable market, he said.
Lending has largely adapted to the wave of regulatory changes in the spring, and sales are getting back on course as demand for homes increases with completions rising to the highest level in seven years in July. New buyer demand is a vital bedrock for the recovery to continue building on, and further interventions or borrowing caps could pull the rug out from under the market, he warned.
He also pointed out that outside of the capital, Help to Buy is giving many households a much needed leg up onto the ladder, helping activity levels and ensuring growth makes further headway to reach areas of the country that are still only just getting back on their feet. There are signs of cooling, according to Sophie Carter, UK director of the US property investment company CityR, and she believes that is by no means immune to the limitations of consumer demand.
We expect this slowdown to gather momentum as wage increases continue to lag the rate of inflation. Falling unemployment is a good indicator that demand will continue to increase. But unless wages in the UK grow in line with a brightening employment picture, consumer demand can only stretch so far, she added.