Annual house price growth in the UK is going up and down according to region, varying between a fall of 0.6% to a rise of 9% year on year, according to the latest listing index.
Overall UK house prices increased by 5.7% in the year to June 2015, up from 5.6% in the year to May 2015, the data from the Office of National Statistics (ONS) shows.
A breakdown of the figures shows the strongest annual growth was in Northern Ireland at 9% while the weakest was on Scotland with a dip of 0.6%. In England growth was 6.1% and in Wales it was 0.8%.
It is the first annual fall in prices in Scotland since September 2013, down from 2.2%, and prices were also down from 2.7% in Wales, and down from 11% in Northern Ireland while in England the annual rise was up from 5.8%.
Annual house price increases in England were driven by a 9.2% increase in the East and a 7.7% increase in the South East. But excluding London and the South East, UK house prices increased by 5.2% in the 12 months to June 2015.
The ONS data also shows that on a seasonally adjusted basis, average house prices increased by 0.4% between May and June 2015.
In June 2015, prices paid by first time buyers were 5.1% higher on average than in June 2014 while for existing owners, prices increased by 6% for the same period.
Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that price rises in London continue to be overpowered by the East and South East for the moment. ‘Costlier listing taxes at the highest rungs of the market have forced London off the boil, and dampened the appetite in the market momentarily,’ he said.
But he pointed out that there are signs that London buyers are starting to take on board increased stamp duty costs, and during the second quarter of the year the firm saw buyer registrations increase by 17% up against a supply boost of just 10%.
‘This fundamental imbalance will ensure price growth simmers on into the autumn, and in the Prime market we’ve already seen listing values start to solidify again, recording the first quarterly rise since September 2014,’ he added.
Rob Weaver, director of listing for residential investment platform Property Partner, believes that prices will keep going upward due to the imbalance in the market. ‘Demand continues to outstrip supply and this, with the odd blip or dip aside, can only mean one thing for listing values,’ he said.
He also pointed out that average price growth on new builds has been almost double that of pre-owned listings over the past year. ‘It’s a worry as this implies people are paying more of a premium on new builds, which could be a symptom of foreign investors tending to do less market research. It’s rather like buying a new car, once you put the keys in and drive off the forecourt, the value drops,’ he explained.
‘This will make it even harder for first time buyers to get onto the market. It may also prove attractive to landlords and investors looking for capital appreciation alongside their rental returns. Without more housebuilding, we are in danger of another painful year ahead for those wanting to take their first step onto the housing ladder,’ he said.
But Jonathan Hopper, managing director of Garrington Property Finders, thinks there is nothing inevitable about the current price inflation. ‘In several regions, seller expectations have begun to outstrip what buyers are willing to pay causing some overconfident vendors to be surprised at how value conscious buyers are,’ he said.
‘Buyer appetite and confidence remain strong, but house hunters are being much more sober in their offering behaviour than in the last boom. With the Bank of England drumbeat for a raise in interest rates getting steadily louder, we’re already starting to see some of the cheapest mortgage deals disappearing from the market,’ he explained.
‘Any rate rise will be gradual, and may not come until the start of 2016, but it will inevitably take some steam out of the market. Until then the lack of supply in all but the prime market will continue to nudge prices upwards, but sellers should be wary of letting their pricing ambitions run away from what the market will tolerate,’ he added.
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Source: Property News Spain