The year-on-year increase reflected growth of 2.8% in England and 6.2% in Wales, which were offset by declines of 1.2% in Scotland and 0.8% in Northern Ireland. Annual house price increases in England were driven by a 6.0% rise in London and a 3.6% increase in the East Midlands. Excluding London and the South East, UK house prices increased by 1.4% in the 12 months to April 2013.
Average mix-adjusted house prices in April 2013 stood at £247,000 in England, £162,000 in Wales, £127,000 in Northern Ireland and £177,000 in Scotland. In April 2013, London continues to be the English region with the highest average house price at £414,000. The North East had the lowest average house price at £143,000. London, the South East and the East of England all had prices higher than the UK average price of £238,000.
Excluding London and the South East, the average UK mix-adjusted house price was £188,000. The average price for properties bought by first-time buyers increased by 4.7% over the year to April 2013, up from an increase of 1.3% in March 2013. During April 2013 the average price paid for a house by a first-time buyer was £179,000.
The average price for properties bought by former owner-occupiers (existing owners) increased by 1.9% in the year to April 2013, down from an increase of 3.2% in March 2013. In April 2013, the average price paid for a house by a former owner-occupier was £273,000.
Giles Hannah, managing director of London agency VanHan, says:
"The national average figures demonstrate a clear divide between London, the home counties and then the UK as a whole. In London, house prices will likely continue an upwards trend over the next three years owing to the severe lack of supply of new homes actually ready and completed. Internationals from Singapore and Hong Kong are buying off plan in new developments, particularly in Covent Garden, which has seen prices soar in the past year. This is not a bubble, the market is simply rising with increased demand, a severe lack of supply and an improving economy in the UK.
"Average London house prices are up 6 per cent and the UK as a whole up 2.6 per cent for the year. In prime central London wealthy French nationals, evading France’s tax hikes, are fuelling price rises in the market as they relocate their families in time for the new school year in September, pushing up prices in Holland Park, Notting Hill and South Kensington. Over in Knightsbridge and Mayfair, several wealthy Nigerian families are buying at the top end having had a record two years in oil production. The aim is to maintain and grow their wealth in London.
"However, agents are concerned that UK homeowners are not moving but taking a 'wait and see' approach because they can't compete with wealthy international buyers who have exchange rate advantages. Demand for property may be high but there are very few UK transactions taking place and agents have little new stock to sell. This position is hardly likely to improve over the summer months.
"While rising house prices are good for sellers, the same is clearly not true for first-time buyers. They are paying 4.7 per cent more, on average, than a year ago, so even though mortgage options are becoming increasingly available, it is costing them more to get on the first rung of the ladder. One wonders how sustainable such growth in pricing is for this group in particular."
Marcus Bullus, trading director at MB Capital, said:
"This sharper than expected rebound in consumer price inflation underlines the continued volatility of the UK economy. Navigating a steady path to recovery against such an erratic economic backdrop is one of the major challenges for today's policymakers. Stability, the one thing policymakers love above all, is in radically short supply.
"If the UK's consumers think this is bad, they'll need to brace themselves even harder for what's coming. Inflation looks set to rise even further during the rest of 2013. We should get used to above target inflation, because there's every reason to believe policymakers will continue to see it as a necessary evil in the short to medium term.
"If Mark Carney targets growth as aggressively as some believe he will, we could be comfortably above target by this time next year. With stubbornly high inflation, and zero or negative wage growth, it could take a number of years before the economy gets back on track."
Andy Knee, Chief Executive of LMS, comments on the ONS house price index for April:
“Despite the fact that house prices across the UK are remaining reasonably stable, the 6% rise witnessed in the capital has seriously affected the overall average. Therefore, the 2.6% year-on-year increase announced this morning does not accurately represent what is happening in the market as a whole.
“The primary issue for most, especially first time buyers, is sourcing the deposit. The introduction of the government’s Help to Buy scheme will undoubtedly instigate a rush of activity, so if you have the means, or particularly generous family members, it would be advisable to get in now.”
