Analysis of data from the leading UK house price indices reveals that the UK housing market saw consecutive monthly price rises in the first half of the year, with prices now up 4.7% since the end of 2011. The average price of a home is now £205,309, an increase of £9,156 since December. This is the highest average price recorded by House Price Watch since June 2008.
The annualised average rate of growth for June was 8.6% while the three, six and 12 month annualised rates of growth are 6.5%, 9.6% and 2.3% respectively. Prices have been rising every month on an annualised basis since September 2011.
Stuart Law, Chief Executive of Assetz, said:
“In spite of GDP falling to 0.7% in the second quarter of this year the UK property market appears to be under the influence of far more positive drivers. All of the figures in the latest House Price Watch point to positive annual growth this year with no ‘double dip’ in the forecast. The market is in fact outshining price performance in the first half of 2011 which went on to see price growth of 0.5% for the year as a whole, further dispelling this myth. However, the latest economic figures could still dampen activity in the third quarter.
“Growth of 4.7% for the year to date is reassuring and it looks like the long period of price stability seen since early 2010 could be making way for a strong rise in prices this year.
While the figures paint a positive national picture some areas continue to outperform others but this is something consumers are increasingly aware of. Savvy buy to let investors are turning to cities outside of London such as Manchester and Leeds where strong demand and a lack of development has meant gross yields of 8% are typical. These investors will help underpin prices in regional cities this year.
The Government’s ‘funding for lending’ scheme and £100billion cash injection will help provide some of the capital the market craves. The ongoing trouble in the Eurozone had threatened to cause many lenders to tighten their belts but several banks and building societies have opted to cut their rates in July, further boosting the market this year. We expect to see annual price growth of 3% in 2012 comfortably achieved.”
