House prices growth remains stable, reports ONS

According to the latest ONS House Price Index, UK house prices increased by 3.1% in the 12 months to June 2013, up from a 2.9% increase in the 12 months to May 2013.

Related topics:  Mortgages
Amy Loddington
13th August 2013
Mortgages

House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average. The year-on-year increase reflected growth of 3.3% in England and 4.3% in Wales, offset by falls of 0.9% in Scotland and 0.4% in Northern Ireland.

Annual house price increases in England were driven by London (8.1%), the West Midlands (3.1%) and the South East (2.9%), although excluding London and the South East, UK house prices increased by 1.0% in the 12 months to June 2013.

On a seasonally adjusted basis, UK house prices increased by 0.4% between May and June 2013.
In June 2013, prices paid by first-time buyers were 3.9% higher on average than in June 2012. For owner-occupiers (existing owners) prices increased by 2.7% for the same period.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says:

"Yet another survey shows that house prices continue to rise, although the picture varies across the country with London leading the way and prices falling in Scotland and Northern Ireland.

"With returns on cash hopeless, buy-to-let investors returning to the market in droves and government schemes to assist homebuyers, we have all the makings of a house price bubble so it is important to moderate and not get carried away. Buyers need to always consider the three most important factors of a property purchase: location, location and location. Buy sensibly, consider schools and transport and if you are buying as an investment, choose a property that a tenant will want to live in rather than one that appeals to you.

"Most importantly, buyers must ensure they don't overstretch themselves. Mortgage rates continue to fall with West Bromwich Building Society cutting the rate on its two-year fix from 2.09% to 1.48% on Friday, although there is a hefty £2,494 fee. However, interest rates will go up again, although not before the end of 2016 at least, so it's vital not to get carried away."

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

"All the recent data suggests there is a resurgence underway in the housing market and increases in prices and transactions are obviously positive indicators. The last few years has seen a lag in values in many parts of the country as the market worked its way through the crisis. So, while steady gradual growth in house prices and increased transactions are a good thing it's important that price inflation does not gallop ahead in places like London & the South East. If that were to happen the net result will be that ordinary borrowers will find themselves priced out and we may see a bubble form which would be bad news for us all."

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