UK house prices growth continues forward march


House prices increased 5.4 per cent in the 12 months to November 2013 - down from the 5.5 per cent increase seen from October 2012 to 2013 but still showing growth gaining momentum across the country, according to data from the Office for National Statistics.

England saw 5.6 per cent growth in the 12 months, with 5.4 per cent in Wales, 2.5 per cent in Scotland and 3.3 per cent in Northern Ireland.

The average UK mix-adjusted house price stood at £248,000 in November, up from £237,000 last January. In England it was £258,000.

In London, prices increased at more than double the UK average, up 11.6 per cent over the year.

With London and the South East taken out of the equation, average UK house prices went up 3.1 per cent over the year to November.

Howard Archer of IHS comments:

While concern over the strength of house price rises has been primarily focused on London... it is notable that the ONS reported that “house price growth is beginning to increase strongly across parts of the UK.

(ONS)

The data corroborates the quick growth seen in the housing market. Last week, a survey by Halifax suggested a 7.5 per cent increase in house prices across the UK last year, and one by Nationwide the week showed prices were up 8.4 per cent in 2013.

This morning, housebuilder Barratt announced that a new Barratt home is now worth £225,000 - well above pre-crisis levels.

But the number of new homes being built is still significantly below the levels seen before the recession. The firm completed 6,195 in the first half 2013/14 compared with the 9.056 is built 2007/8.

Archer:

Limited supply of houses is a factor pushing up prices in an increasing number of areas and not just in London and parts of the South East.

We expect house prices to increase by around 8 per cent in 2014 with gains across the country.

The decision of the Bank of England and the Treasury to end Funding for Lending support for lending to households from January looks a highly sensible decision, although in itself it is unlikely to act as a major brake on housing market activity.

It is very important that the Bank of England has indicated that it is prepared to take further action to rein in the housing market if prices continue to rise markedly amid ongoing strengthening activity.