The latest figures for UK house prices continue to show a modest upward trend, with experts predicting that is likely to continue. There are signs that there is an increase in demand, but a lack of properties for sale in some parts of the country is fuelling a rise in prices.
Figures from Nationwide Building Society show an overall rise of in 0. 3% in June. They also show that the annual rate of house price growth increased to 1. 9% in June - the fastest pace since September 2010.
The Land Registry’s house price index for property sales registered in May confirmed this rise. The registry’s figures for England and Wales show the average annual price change was 0. 5%, with the average price of a home now being about £162, 000.
London house prices continue to show strong recovery, with an average increase of over 5%, and even higher in some London boroughs. According to the land registry, the average price for a home in the capital is now £375, 068, while Nationwide says that prices there are now 5% above their 2007 peak.
Property prices increasing in the Midlands and North of England
However there are now signs that prices are beginning to rise again in some areas where up to now they have been stagnant. In the East Midlands prices rose by an average of 2% in May, in the North East 1. 5% and the North West 1. 3%. Rises of 0. 7% were also recorded in Yorkshire and the West Midlands.
Admittedly the picture is uneven within those areas, as the land registry’s more detailed report shows prices in some districts still showing falls, while other areas have bounced back. No doubt as always location is a significant factor.
A recent survey for the Financial Times showed that overseas buyers continue to be interested in residential property especially in London. Central boroughs such as Camden, Westminster and Hammersmith particularly continue to show above-average increases in excess of 10%.
But anyone looking for a real property hot-spot might do well to investigate Blaenau Gwent district in South Wales – here prices appear to have rocketed by 16. 6% since last year. And as the average house price in this district is just a little over £80, 000 you don’t have to be a Russian oligarch to afford something.
In North Wales both Gwynedd and Ceredigion show annual rises of over 6%, but other parts of the Principality have fared less well.
The Nationwide’s chief economist, Robert Gardner, is optimistic about the general upward trend. Speaking about the June figures, he said
“A number of factors are likely to be contributing to the recent acceleration. Demand for homes has been supported by further modest gains in employment, as well as an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Signs of a modest improvement in wider economic conditions may also be playing a role in boosting buyer sentiment.
“At the same time, there are few signs that the supply of housing is improving significantly. Indeed, construction data point to a further decline in building activity in recent quarters from already depressed levels. For example, in Quarter 1 2013 housing completions in England were down 8% compared to the same period of 2012 and around 40% below the average number of quarterly completions in 2007”.
Semi-detached out, flats in
One perhaps significant statistic in all these figures is that while the average prices for most property prices have generally increased across England and Wales, the annual average price for semi-detached houses saw a slight fall of 0. 2%. On the other hand prices for flats and maisonettes rose by 2%.
At one time a three-bed semi-detached suburban home was many people’s ideal family home. But it does look as if demand for that type of property has declined somewhat, while flat-owning has become more common.
First-time buyers are now likely to be unable to afford more than a small flat in many parts of the country. Certainly developers are now featuring more properties of that type in new developments. Buy-to-let investors are also attracted to such properties, which can easily be let and are likely to show a reasonable return when sold.
With mortgage rates continuing low and demand from buyers strengthening, things are looking brighter for anyone thinking of selling a property. The supply of new-build homes does not look set to increase for some time, so we are likely to see more demand for existing properties. This should be a benefit to home-movers who want to trade up or move area.