The report also highlighted that House price annual inflation was 10.4% in England, 3.3% in Wales, 4.8% in Scotland and 2.6% in Northern Ireland. House prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth.
Annual house price increases in England were mainly driven by rises in London (18.7%), the South East (8.9%) and the East (8.5%).
Excluding London and the South East, UK house prices increased by 6.3% in the 12 months to April 2014. On a seasonally adjusted basis, average house prices increased by 2.0% between March and April 2014.
In April 2014, prices paid by first-time buyers were 10.7% higher on average than in April 2013. For owner-occupiers (existing owners), prices increased by 9.5% for the same period.
Richard Sexton, director of e.surv chartered surveyors, commented:
“House prices are continuing their upward ascent, but the distinctive market in the capital continues to cloud the waters. Excluding London tells a very different tale. Outside the cash-rich London and the South East, many regions are still in the early days of the recovery.
Housing markets in areas like the North East and North West are far more sedate. Here, first-time buyers are playing a key role in keeping the property market aloft. Help to Buy has allowed more lower-equity borrowers to get on the housing ladder – and the scheme must be allowed to run its course to keep up demand in areas of the country where additional support is a vital necessity.
With the capital dominated by foreign investors and buy-to-let landlords - which are adding a further dynamic of demand into the mix for homes - there’s been an intensifying clamour for intervention. But any action must be prudent, to avoid any negative impact on the more susceptible areas of the country.”
Karen Bennett, Sales and Marketing Director, Commercial Mortgages, Shawbrook Bank:
“The continued strength of house prices shown by the latest ONS figures won’t come as a surprise for anyone in the industry. Again, house prices are driven by London and the South East, but it’s important not to forget the state of housing in the rest of the country. House prices in other regions are increasing at a slower rate but are rising and are a promising environment for experienced property investors who are looking to engage with a buoyant property market. It will be interesting to see how later in the year overall demand for housing and house prices are affected by tightening residential controls due to the MMR.”
Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“Strong house price growth is no longer a trend restricted to the South, with average prices across the country up by almost 10% since April 2013. In comparison to London, many regions have been dragging their feet in terms of housing recovery, so consumers in these areas will undoubtedly benefit from a sizeable boost to their housing equity.
While London’s house price growth has soared over the past year, recent data indicates that the capital’s housing market is starting to come off the boil, with prices growing at a much slower rate and even falling in some boroughs*. As the year progresses and the changes implemented by the Mortgage Market Review (MMR) have time to bed in, we may well see a more relaxed pace of growth take hold.
The full impact of MMR is still yet to be seen, so knee-jerk decisions by the government to restrict house prices could well shoot recovery in the foot. The focus instead should lie on building new houses, as a chronic shortage of supply will seriously restrict consumers’ ability to fulfil their homeowning ambitions if not addressed soon.”
Peter Rollings, CEO of Marsh & Parsons, comments:
“The growth rate currently being experienced in the London property market is eclipsing the rest of the UK, with house prices in the capital rising by nearly 19% in the year to April 2014. With its international appeal as a sanctuary for capital investment, and its allure as a vibrant city to live and work in, the level of demand for property in London is unparalleled across the rest of the country.
But we’ve reached a turning point. After a very lively start to the year, where an acute lack of supply and subsequent competition for homes pushed prices higher, we’re now sailing into steadier waters. Stricter controls for mortgage affordability and the renewed housing stock is moderating the market and property price growth has slowed. As a result, in Prime London the ratio of registered buyers per available property has fallen from 24 in January 2014 to 16 in June, so as the market returns to more normal trading conditions, buyers can make the most of the extra breathing space.
London has long been akin to its own city state, and is wholly unrepresentative of the broader nationwide picture. If the government or the Bank of England were to slam their foot on the brake too heavily, they risk setting back the emergent housing market recovery outside of the capital. In his Mansion House speech, the Chancellor indicated that he will not tinker with the Help to Buy scheme, which is buoying the lower end of the market and helping redress the imbalance across the country.”
Stuart Law, CEO at Assetz, comments:
“The data released today is actually a market snap-shot of the UK in April. The hot topic now is the easing back of property price growth in the London market as demand for homes dips due to a mixture of factors such as the Mortgage Market Review and chatter of interest rates rising sooner than expected.
What this data does show is the strength of regional property markets, with annual growth across all areas of the country – even the North, which until recently was struggling to gain momentum. Help to Buy has spurred on demand mostly outside of London and the South East and whilst London is still viewed as the safest place in the world for property investors for capital growth, those searching for better future returns are looking away from London, to where employment is strong and yields are growing.”
