Liquid error: wrong number of arguments (2 for 1) UK house prices see 11.7% year-on-year increase to July 2014 | Marsh & Parsons Sales and Lettings Estate Agents London

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UK house prices see 11.7% year-on-year increase to July 2014

Tue 16 Sep 2014

The report highlights that house prices are increasing strongly across the UK, with prices in London again showing the highest growth. House price annual inflation was 12.0% in England, 7.4% in Wales, 7.6% in Scotland and 4.5% in Northern Ireland.

Annual house price increases in England were driven by an annual increase in London of 19.1% and to a lesser extent increases in the South East (12.2%) and the East (10.6%). Taking London out of the equation, UK house prices increased by 7.9% in the 12 months to July 2014.

On a seasonally adjusted basis, average house prices increased by 1.6% between June and July 2014. In July 2014, prices paid by first-time buyers were 13.5% higher on average than in July 2013. For owner-occupiers (existing owners), prices increased by 10.9% for the same period.

David Newnes, director of Reeds Rains and Your Move estate agents, comments: "What's happening in London may be eye-catching, but it is akin to looking through a kaleidoscope - and skews any view of the current total housing landscape. Peeling back the regional layers gives a much more informed view of the core reality of the current market. According to our own research, house price growth slowed across all regions except for London, the South East and East Anglia in July.

While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth. Most recently we're seeing asking prices in the capital start to be reined in, which will apply the brakes on annual house price inflation as the market steadies.

With evidence of London starting to cool off after strong growth earlier in the year, it is critical that the underlying momentum that has stimulated much needed increased volume in the rest of the market is allowed freedom to keep moving, whilst any price rises are kept steady and under control. Further afield, it is critical that support mechanisms like Help to Buy aren't dismantled. Compared to the nadir of 2008-2012, activity in the housing market has improved, but is not completely out of the woods yet, and still needs to recapture some of the vitality of its pre-recession health."

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments: "Rising house prices have been cast as the villain of the housing market for many months now, but for many people, the boost in property prices over the last year signals a healthy and recovering market. For a large number of existing homeowners, a significant rise in the value of their home can free them to secure a better mortgage deal."

Mortgage Advice Bureau's latest report* estimated that around 3 million consumers are 'silent prisoners', trapped in their current mortgage for reasons such as low or negative equity and tighter lending criteria. However, our analysis of ONS data shows every 1% rise in house prices is giving mortgaged homeowners another 23bn of housing equity - granting parole to many who have been trapped in their existing circumstances.

Recovering prices mean these homeowners will finally have sufficient equity to make the most of the low-rate products currently available on the market, saving themselves a significant amount in monthly mortgage repayments.

UK house prices see 11.7% year-on-year increase to July 2014

Let's not forget, prices have been recovering from a low base following the financial crisis, and the fact that property values are also rising in several regions outside of the capital suggests a more hopeful and sustainable future for the housing market. However, it is crucial that first-time buyers - who are paying 13.5% more on average than in July 2013 - are offered as much help as possible to ensure they are not left behind as the housing recovery continues.

Help to Buy is continuing to support those who are unable to save up for a hefty deposit, while the construction industry must be given license to ramp up the production of new homes and avoid an even greater imbalance between supply and demand. "

Peter Rollings, CEO of Marsh & Parsons, comments: "UK house price growth is persevering with its upward climb, but the stride is steadying - with prices rising an orderly 1.6% in the month to July 2014. However, London remains the snag in the fabric of the nationwide property market, showing an annual increase of 19.1%. As an international nerve centre for employment, finance and culture, the city is cut from a different cloth - and is engulfed by more powerful demand for homes, which has always pushed price inflation to the next level.

Yet the market is returning to business as usual. This is a welcome boost to consumer confidence, as more natural trading conditions kick in and greater supply soothes both competition and price rises. Buying your first property or trading up is less disheartening than it was a few months ago, and the added choice available at buyers' fingertips will ensure sales climb comfortably for the rest of 2014."

Richard Sexton , director of e.surv chartered surveyors, commented: "London and the South East are stoking the housing market and firing forward house price growth. But taking the south east corner of the country out of the equation reveals a housing market that may be warming up, but is in no way out of control. Many areas of the country are only just returning to life after seven years of post-recession stagnation. Factor in inflation too, and annual house price rises are in the region of 6% - far more moderate than the headline figures imply.

There are far more pressures on London's housing stock. Demand for property from buy-to-let landlords and a rapidly growing population, are pushing up prices. However, demand from foreign investors at the top of the market is slowly starting to tail off, as sterling increases in strength.

Still, there is a real lack of affordable first-homes. Planning restrictions need to be eased immediately in order to help supply of new homes meet the vigorous demand at the bottom of the market. Help to Buy has acted like a shot in the arm to confidence, encouraging more first timers back to the market. But we need to match the increased demand with increased property; in that respect Help to Buy can only go halfway."

http://www.propertyreporter.co.uk/view.asp?ID=14324

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