Stable UK house price picture hides regional variations
Tue 18 Sep 2012
LONDON (SHARECAST) - The second house price survey released this week confirmed what we already know: that house prices in London are rising faster than in the rest of the country.
Data from the Office for National Statistics shows its House Price Index for July standing 2% higher than it did a year earlier, but house prices in London over the same period rose 5.7%.
With house prices for London and the South-East stripped out, the annual increase is pared to 0.6%, a level of stability which might not please British home owners used to regarding their dwellings as a surrogate pension pot, but which will provide a modicum of comfort to the tens of thousands of people struggling to get their foot on the bottom rung of the property ladder.
In Scotland and Wales, house prices actually dipped a little year-on-year, by 1.1% in the former and by 0.2% in the latter. Once again, Northern Ireland was the region to see the biggest decline in house prices, with the selling price of a typical home down 10.9% from a year earlier.
On a seasonally adjusted basis, the House Price Index for July was unchanged from June.
"These figures confirm that the housing market is robust, despite subdued lending activity across the board and the influence of central London stats on UK house price growth," claimed Paul Hunt, Managing Director (MD) of Phoebus Software, a software house focused on the savings and loans sector.
"There is still major stagnation at the bottom of the market but I'm hopeful that the government's recent announcement of a £280m extension of its First Buy shared equity scheme and plans for a new home-building programme will boost first time buyer activity. The government’s role is crucial if mortgage lending targets are to be met in order to move the market forward," he added.
Ben Thompson, MD of the Legal & General Mortgage Club, was similarly upbeat about the figures.
"Given how difficult the last year has been in terms of the economy and wider Eurozone instability, these figures don't look too bad at all. It appears as though barring future major shocks to the system prices have broadly stabilised, although there is a very regional picture," Thompson said.
"Historically, when we have seen prices stabilising and rising, and renting being more expensive than buying, tenants and those living with their parents wanted to take the plunge and buy. However, with low confidence levels and a lack of genuine mortgage finance for first time buyers being truly available, we are into unchartered territory. It will be interesting to see how the next few years unfold as they will probably determine the shape of housing tenure in the UK for years to come,” he suggested.