UK property prices up 8.4% year on year, but annual growth still slowing

Taylor Scott International News

UK house prices increased by 8.4% in the year to January 2015, down from 9.8% in the year to December 2014, according to the latest index. House price annual inflation was 8.5% in England, 4.9% in Wales, 7.8% in Scotland and 7.3% in Northern Ireland, the data from the Office of National Statistics show. Overall it means that annual house price growth is beginning to show signs of slowing across the majority of the UK. Annual house price increases in England were driven by an annual increase in London of 13% and to a lesser extent increases in the East at 9.9% and the South East at 7.6%. However, excluding London and the South East, UK house prices increased by 6.5% in the 12 months to January 2015. On a seasonally adjusted basis, average house prices fell by 0.2% between December 2014 and January 2015. The data also shows that in January 2015, prices paid by first time buyers were 9.7% higher on average than in January 2014 while for existing owners prices increased by 7.8% for the same period. Scotland is seeing strong recovery with house prices up by 7.8% in the year to January 2015, up from 5.5% in the year to December 2014. It means that the index for Scotland is just 0.9% below the record level witnessed in August 2014 and prices are 1% higher than the pre-economic downturn peak of June 2008. Adrian Gill, director of Your Move and Reeds Rains estate agents, believes that more needs to be done to keep the property market recovery on track as it is clear that rates of annual growth have slowed across the board in England and Wales. ‘After storming ahead of the rest of the country in the whirlwind of 2014, conditions have calmed in London and the South East. The capital has already had the first taste of added pressure placed on prime property in the form of revised Stamp Duty, and the £1.5 million to £5 million slice of the market has also been hit by cold feet in the run up to the general election with the threat of a potential mansion tax,’ he said. ‘This let up of high end activity has brought down the average London house price, but it is regions with the lowest average property prices which are dragging their feet. The housing shortage may be propping up property price growth, but more needs to be done,’ he explained. ‘Measures like the Help to Buy scheme and reforming Stamp Duty have airlifted support to the bottom end of the market, but unless more new homes are built, the government are practically playing a zero sum game,’ he added. Nicholas Leeming, chairman of national estate agents Jackson-Stops & Staff, said it shows that the popular Help to Buy schemes must continue. ‘The ONS figures show that, while there is still some pre-election nervousness amongst buyers of higher value properties, the majority of the UK housing market… Taylor Scott International

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