UK house prices up 10.4% annually, but inflated considerably by growth in London

Taylor Scott International News

UK house prices increased by 10.4% in the year to October 2014, down from 12.1% in the year to September 2014, the latest index from the Office of National Statistics shows. England saw the steepest price rises with an annual increase of 10.8% in England, while in Wales it was 5.7% and Scotland and Northern Ireland both saw year on year gains of 4.9%. But a closer look at the figures show that annual house price increases in England were driven by an annual increase in London of 17.2% and to a lesser extent increases in the South East of 11.9% and the East at 9.6%. So, excluding London and the South East, UK house prices increased by 6.7% in the 12 months to October 2014. And on a seasonally adjusted basis, average house prices increased by 0.1% between September and October 2014. The ONS data also shows that in October 2014 prices paid by first time buyers were 12% higher on average than in October 2013. For existing owners, prices increased by 9.7% for the same period. David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that it is good news that annual house price growth across England and Wales has more than doubled over the last 12. ‘The considerable uplift in values over the year to November 2014 has pushed the average price of a home in England and Wales above £280,000 for the first time. These figures are spurred on by London and the South East, where the housing recovery has been fast tracked,’ he said. ‘When these regions are removed from the calculations, a calmer annual rise in house prices materialises. After a temporary hiatus at the highest tiers of the property market, growth has rallied again in the capital with values in prime spots such as Kensington and Chelsea, and Hammersmith and Fulham surging 5.3% over the course of the month, hitting new price records along the way,’ he explained. ‘Yet after a solid advance in activity throughout 2014 to date, completed house sales withdrew last month, from a particularly busy October. This doesn’t undermine the strength and stability of the growth in activity experienced over the year as a whole in some locations,’ he added. He believes that the changes to the Stamp Duty system should also allow activity to build further at the bottom rungs of the ladder, facilitating hefty savings. ‘This should help erode the upfront barriers of purchasing a home for the significant majority of buyers and sellers may feel the benefit of weightier demand, as well as being able to price their homes more realistically, without having to tactically negotiate threshold barriers,’ said Newnes. ‘In the year to September 2014, 69% of completed house sales on properties worth £1,125,000 or more were in London, and a further 19% took place in the South East. These more expensive regions will bear the brunt of stronger Stamp Duty tax at the highest levels,’… Continue reading →

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