UK house prices increased by 5.2% in the year to August 2015, unchanged from the previous month but excluding London and the South East the increase was 4.8%, the latest official figures show.
House prices increased by 5.6% in England, 0.8% in Wales, 2.9% in Northern Ireland and fell 0.9% in Scotland, according to the figures from the Office of National Statistics (ONS).
The data also shows that annual house price increases in England were driven by an annual increase in the East of 8.8% and the South East at 7.4% while month on month they increased by 0.7% nationwide.
In August 2015, prices paid by first time buyers were 3.8% higher on average than in August 2014 and for existing owners prices increased by 5.8% for the same period.
The North East recovered from an annual fall in house prices in the year to July 2015 of 0.7% to show annual growth of 2.9% in the year to August and London prices increased by 4.2% over the year to August 2015, down from 5.5% in the year to July 2015.
Average mix-adjusted house prices in August 2015 stood at £298,000 in England, £174,000 in Wales, £151,000 in Northern Ireland and £198,000 in Scotland. Excluding London and the South East, the average UK mix-adjusted house price was £217,000.
London continued to be the English region with the highest average house price at £522,000 and the North East had the lowest average house price at £160,000. London, the South East and the East all had prices higher than the UK average price of £284,000.
According to Adrian Gill, director of Reeds Rains and Your Move estate agents, growth is primarily being underpinned by sturdy demand and solid activity at the bottom of the listing ladder. ‘The cheaper northern regions are experiencing the fastest growth in listing sales, while a shortage of listing stock on the market in the south is slowing activity,’ he said.
‘The most frequently paid listing price across England and Wales is just £125,000, mirroring the level at which stamp duty becomes payable, and reflecting the impetus that has been injected in the first-time buyer market recently,’ he pointed out.
‘It is also the lower to mid-range listings priced between £180,000 and £360,000 which are seeing the fastest increases in value, while the shift in stamp duty bands continues to slow growth at the higher end of the market, and prices above £600,000 are largely stationary,’ he explained.
‘Despite this, London is firmly back in the driving seat of listing price rises, following a slight pit stop, and is having a much greater influence on national measures of price growth on an annual basis. As in the rest of the country, it’s the more affordably priced London boroughs which are behind this renaissance, as the strengthening of sterling, rising stamp duty rates and moves against non-doms take their toll on the high end market,’ he added.
Lora Roberts, portfolio manager at estate agent Ascend Properties, said that while on the surface, news that’s prices paid by first time buyers are up 3.8% on the same day that inflation has been announced as turning negative again might appear bleak on paper. ‘But the reality is that we are seeing a healthy and fluid market across both sales and lettings. We are seeing signs of increased confidence across the board, with enquiries up for both segments of the market,’ she added.
A shortage of stock has pushed prices up, according to Martin Robinson, director of sales at Hunters Property Group but he pointed out that there has been a reduction in sales falling through, which is another good indicator that people are confident in what they are buying.
Jonathan Hopper, managing director of the buying agents Garrington Property Finders, believes that while the UK’s rate of annual price growth was unchanged, the progress is slowly becoming more broad based with East and South East England emerging as the star performers.
‘But it’s far too early to talk of an end to Britain’s two speed listing market. Prices in Scotland have failed to make up the ground lost in spring, and in the North East of England prices are still languishing 1.7% below their pre-crash levels,’ he said.
‘Despite the slight softening of prices in the capital, a wave of bullish sentiment plus the ever more imminent prospect of an interest rate rise has inspired thousands of would be buyers in southern England that now is the time to act,’ he explained.
‘With ultra-hotspots like Cambridge powering East Anglia to a level of annual price growth that was once typical of London, north/south divide remains firmly in place. The picture across much of the south is of an acute shortage of supply at all but the highest price points, and steadily increasing prices is the inevitable result,’ he added.
Nicholas Leeming, Chairman of national agents Jackson-Stops & Staff, with 44 offices nationwide, said that record levels of prices reflect the combination of restricted supply and sustained demand.
‘There remains a stand-off between buyers and sellers at the top end of the market, with neither party prepared to accept the higher cost of stamp duty. London has been particularly affected by the stand-off because of the prevailing, higher values in the capital. The number of listings coming on to the market remains low at the top end,’ he added.
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Source: Property News Spain