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UK house prices up 5.2% year on year, says latest ONS index
UK house prices increased by 5.2% in the year to August 2015, unchanged from the previous month but excluding London and the South East the increase was 4.8%, the latest official figures show. House prices increased by 5.6% in England, 0.8% in Wales, 2.9% in Northern Ireland and fell 0.9% in Scotland, according to the figures from the Office of National Statistics (ONS). The data also shows that annual house price increases in England were driven by an annual increase in the East of 8.8% and the South East at 7.4% while month on month they increased by 0.7% nationwide. In August 2015, prices paid by first time buyers were 3.8% higher on average than in August 2014 and for existing owners prices increased by 5.8% for the same period. The North East recovered from an annual fall in house prices in the year to July 2015 of 0.7% to show annual growth of 2.9% in the year to August and London prices increased by 4.2% over the year to August 2015, down from 5.5% in the year to July 2015. Average mix-adjusted house prices in August 2015 stood at £298,000 in England, £174,000 in Wales, £151,000 in Northern Ireland and £198,000 in Scotland. Excluding London and the South East, the average UK mix-adjusted house price was £217,000. London continued to be the English region with the highest average house price at £522,000 and the North East had the lowest average house price at £160,000. London, the South East and the East all had prices higher than the UK average price of £284,000. According to Adrian Gill, director of Reeds Rains and Your Move estate agents, growth is primarily being underpinned by sturdy demand and solid activity at the bottom of the property ladder. ‘The cheaper northern regions are experiencing the fastest growth in property sales, while a shortage of property stock on the market in the south is slowing activity,’ he said. ‘The most frequently paid property price across England and Wales is just £125,000, mirroring the level at which stamp duty becomes payable, and reflecting the impetus that has been injected in the first-time buyer market recently,’ he pointed out. ‘It is also the lower to mid-range properties priced between £180,000 and £360,000 which are seeing the fastest increases in value, while the shift in stamp duty bands continues to slow growth at the higher end of the market, and prices above £600,000 are largely stationary,’ he explained. ‘Despite this, London is firmly back in the driving seat of property price rises, following a slight pit stop, and is having a much greater influence on national measures of price growth on an annual basis. As in the rest of the country, it’s the more affordably priced London boroughs which are behind this renaissance, as the strengthening of sterling, rising stamp duty rates and moves against non-doms take their toll on the high end market,’ he added. Lora Roberts, portfolio manager at estate agent Ascend… Continue reading
Irish property prices continue to see sustained growth
Property prices in Ireland increased nationwide by 2.3% in August and are up 9.5% compared to a year ago, the latest official data shows. In Dublin property prices rose by 2.8% in August and were 8.2% higher than in August 2014. A breakdown shows that house prices are rising faster than apartments at 3% and 0.3% respectively. However, the index report from the Central Statistics Office says that it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. In the rest of Ireland, excluding Dublin, prices rose by 1.9% in August and were up 10.8% compared with August 2014. This means that at a national level residential property prices were 35.4% lower than their peak level in 2007 and excluding Dublin residential prices were 38.7% lower than their highest level in 2007. In Dublin house prices were 34.4% lower than the peak, apartment prices 40.4% lower and Dublin residential property prices overall 36.2% lower than their highest level. However, there are concerns that house prices are growing too fast. The Irish economy grew by a Eurozone record of 7.2% in the second quarter and according to the Organisation for Economic Development and Coordination (OECD) is set to grow by 5% overall in 2015 and 4% in 2016. But the OECD is concerned that rapidly rising house prices still pose one of the biggest risks to financial stability and an uncontrolled property boom would ‘increase vulnerabilities, especially if it were associated with further indebtedness’. Its latest review says that such strong price rises may again spark a reinforcing spiral of higher property prices and credit leading to another misalignment of property prices and eventual burst that causes large losses in the banking sector. ‘To avoid repeating past mistakes, now is the time to build resilience against future nasty surprises while ensuring the recovery is sustained, and its benefits broadly shared,’ said Angel Gurría, secretary general of the OECD. The OECD suggested that the Irish government should take measures to cool the market, such as avoiding subsiding first time buyers and encouraging growth in the rental market. Continue reading
Average rent of newly let home in UK now close to £1,000 per month
The average rent of a newly let home in the UK has increased by 3.6% year on year to £941 per month, according to the latest rental market index. The gap between the places where people can afford to rent and where they can afford to buy has widened in every year since the market downturn in 2008, the data from Countrywide plc also shows. People are also moving further away if they buy a home. The index report says that 51% who took their first steps on the housing ladder in 2015 bought outside the town or city where they had been renting, up from 39% in 2008. With house prices rising faster than rents, an increasing number of households find themselves renting in places where they couldn’t afford to buy and tenants in the South of England tend to move furthest to get on the housing ladder. This is where the gap between where people can afford to rent and buy is largest and has widened the most since 2012. Across London and the South East house prices have increased 42% since 2012, rising from £218,000 to £375,000. Over the same period rents have only increased 19% from £1,000 to reach £1,234 a month. The growing number of tenants moving further to buy is both a product of stretched affordability and first time buyers getting older, the report suggests, adding that tenants are increasingly choosing to compromise on location in in order to own their first home. Those renters who bought a home in the last year, bought in a place where the average house price was £35,000 lower than where they were renting. Across the UK as a whole, two thirds of tenants bought in a cheaper area but there were even more in the most expensive housing markets. In London some three quarters of tenants who bought in the last year, ended up living somewhere cheaper than where they had been renting with an average price gap between the two places of £93,000. Further north, however, a rather different picture starts to emerge. In some of the less expensive areas of the country, tenants tend to be less constrained by affordability when making the move into home ownership. Tenants buying in the North East, North West and Yorkshire, tend to buy in similarly priced areas to where they are renting. The average difference in price between where they were renting and where they bought is just £8,000. In a number of the cheapest northern cities such as Newcastle, the average tenant buying their first home actually moves from a cheaper area to a more expensive one. In addition to affordability, space is a deciding factor of where tenants choose to purchase, according to the report. Irrespective of location, those tenants making the move further afield also tend to buy the largest homes. Nationally, 32% of… Continue reading
