House prices stable with 2.0% increase

In the 12 months to July 2012 UK house prices increased by 2.0 per cent, down from a 2.3 per cent increase in the 12 months to June.

Related topics:  Legal
Amy Loddington
18th September 2012
Legal
Key facts:

- House prices remain relatively stable across most of the UK although prices in London continue to increase whilst Northern Ireland prices are falling
   
- The year-on-year increase reflected growth of 2.4 per cent in England, which was offset by declines in Scotland, Wales and Northern Ireland of 1.1 per cent, 0.2 per cent and 10.9 per cent respectively
   
- Annual house price increases in England were driven by a 5.7 per cent rise in London, and increases in the East of England and Yorkshire and the Humber of 2.4 per cent and 2.0 per cent respectively.  Annual house prices decreased by 1.3 per cent in the North West and 0.5 per cent in the North East Excluding London and the South East, UK house prices increased by 0.6 per cent in the 12 months to July 2012
   
- On a seasonally adjusted basis, UK house prices were unchanged between June and July

- Prices of new dwellings rose by 1.6 per cent during the 12 months to July 2012, while the price of pre-owned dwellings increased by 1.9 per cent in the same period
   
- In July 2012, prices paid by first-time buyers were 1.8 per cent higher on average than in July 2011. For owner-occupiers, prices increased by 2.0 per cent for the same period


According to data released today by the Office for National Statistics, average mix-adjusted house prices in July 2012 stood at £242,000 in England, £159,000 in Wales, £130,000 in Northern Ireland and £183,000 in Scotland.

Location

In July 2012, London continues to be the English region with the highest average house price at £397,000. The North East had the lowest average house price at £145,000. London, the South East and the East of England all had prices higher than the UK average price of £234,000.

Excluding London and the South East, the average UK mix-adjusted house price was £188,000.

Type of buyer


The average price for properties bought by first-time buyers increased by 1.8 per cent over the year to July 2012, compared with an annual increase of 3.1 per cent in June 2012. During July 2012 the average price paid for a house by a first-time buyer was £174,000.

The average price for properties bought by former owner-occupiers (existing owners) increased by 2.0 per cent in the year to July 2012, compared with an increase of 2.1 per cent in June 2012. In July 2012, the average price paid for a house by a former owner-occupier was £269,000.

Type of property

During the year to July 2012 prices paid for pre-owned dwellings increased by 1.9 per cent on average, compared with an increase of 2.1 per cent in the year to June 2012. The average UK house price for pre-owned dwellings in July 2012 was £235,000.

During the year to July 2012 prices paid for new dwellings increased by 1.6 per cent on average, compared with an increase of 5.9 per cent in the year to June 2012. The average UK house price for new dwellings in July 2012 was £213,000.

Ben Thompson, MD Legal & General Mortgage Club, said:

“Given how difficult the last year has been in terms of the economy and wider Eurozone instability, these figures don't look too bad at all. It appears as though barring future major shocks to the system prices have broadly stabilised, although there is a very regional picture.

"It may be a while before consumer confidence picks up in earnest, however when it does, we should see these figures improve a bit, as there currently remains a lack of relevant housing stock for sale.

"Historically, when we have seen prices stabilising and rising, and renting being more expensive than buying, tenants and those living with their parents wanted to take the plunge and buy. However, with low confidence levels and a lack of genuine mortgage finance for first time buyers being truly available, we are into un-chartered territory. It will be interesting to see how the next few years unfold as they will probably determine the shape of housing tenure in the UK for years to come.”

David Newnes, director of LSL Property Services, comments:

“It’s a testament to the resilience of the housing market and the important role played by cash buyers that house prices are rising annually, despite the bleak economic outlook and moribund mortgage market.  As lending remains suppressed across the country, activity has been supported by the vibrant demand from cash investors in London, and this has filtered outwards.

"While it is highly encouraging for homeowners that house prices have risen, the downside is that it intensifies the pressure for new buyers who must save up even higher amounts for deposits, a feat made even harder by the very tight credit conditions at present. Progress can be made if lenders focus on offering attractive mortgage products to help support those frustrated buyers currently relying on the private rented sector, which would drive activity right up the property chain.”

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