The year-on-year increase reflected growth of 2.8% in England and 6.2% in Wales, which were offset by declines of 1.2% in Scotland and 0.8% in Northern Ireland.
Annual house price increases in England were driven by a 6.0% rise in London and a 3.6% increase in the East Midlands.
Excluding London and the South East, UK house prices increased by 1.4% in the 12 months to April 2013.
On a seasonally adjusted basis, UK house prices increased by 0.4% between March and April 2013.
In April 2013, prices paid by first-time buyers were 4.7% higher on average than in April 2012. For owner-occupiers (existing owners) prices increased by 1.9% for the same period.
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), comments on new data released today by the Office for National Statistics (ONS):
“While rising house prices are great news for homeowners, buyer optimism may become clouded by concerns of a housing bubble. First time buyers have been hit hardest by the increasing costs paying nearly 5% more on average in April 2013 than last year, compared to a 2% rise for existing owners. Higher house prices mean overcoming bigger barriers to access the market, locking out anyone unable to raise a substantial deposit.
However, cut-price mortgage deals do offer hope as rates continue to fall across two, three and five year fixes. Help to Buy has also had a successful start, reaching 4,000 reservations in its first two months. Anyone nervous about inflated prices should seek specialist advice from brokers, who may be able to track down deals to tackle any financial blockade.”
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, comments:
“The housing market is crackling with electricity at the moment. Help to Buy and Funding for Lending have increased the voltage in the mortgage market, which has energised first-time buyer lending and sparked the house purchase market back into some sort of life. Rates on first-time buyer mortgages have fallen to an average of 4.31%, and banks are more willing to lend to borrowers with deposits of 15% or less – borrowers who didn’t have a look in twelve months ago. While lenders are still cautious, they are at least cautiously optimistic, which is good news for prospective buyers.
Some significant obstacles to a full recovery still remain: deposit requirements are still relatively high, stunted wage growth, and lenders capital constraints holding back more ambitious lending are the most notable. And if Help to Buy does indeed increase the supply of lower LTV mortgage money - in turn increasing demand - this may inflate house prices, which will make life harder for some first-time buyers finding it hard to save a suitable deposit. New buyers will be the vital foundation of the housing market’s recuperation from the blows of the financial crisis, which makes the recent improvements very encouraging indeed.”
Peter Williams, Executive Director of the Intermediary Mortgage Lenders Association (IMLA), says:
“As if it wasn’t already a challenge to save for a deposit, the average price paid by first time buyers was 4.7% higher in April 2013 than the same time last year. Unfortunately, the current state of the market will be disheartening for many young adults in the UK and as a result, the number of people aspiring to own their own home is falling. This trend is only likely to continue unless appropriate action is taken.
Improving access to the property ladder is clearly a high priority for the government given its investment in Help to Buy. But short-term measures will not be enough to change the overall balance of the market. Instead it is essential we take a long-term view on homeownership for future generations and consider what actions are needed to avoid a lasting economic and social imbalance.”
