House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average, with reflected growth of 3.1% in England, 0.8% in Scotland, 0.6% in Wales and 1.9% in Northern Ireland.
May 2013 is the first month that Northern Ireland house prices have grown year-on-year since February 2008. Annual house price increases in England were driven by a 6.6% rise in London and a 2.7% increase in both the North West and the West Midlands. However, excluding London and the South East, UK house prices increased by 1.9% in the 12 months to May 2013.
In May 2013, prices paid by first-time buyers were 4.1% higher on average than in May 2012. For owner-occupiers (existing owners) prices increased by 2.5% for the same period.
Ben Thompson, MD Legal & General Mortgage Club, comments:
“Once again the ONS data suggests that UK house prices are continuing to rise this month. It’s always great to see positive data concerning the housing market. All signs are that the recovery is gathering significant momentum. However, it is important that we remember its still early days and although the picture looks rather rosy in certain areas, such as London, recovery is a slower process in other parts of the country. The importance of Government stimulus can not be underestimated and the confidence it has created and has been very welcome. Attention must now be turned to tackling the long-term structural issue of inadequate housing supply in the UK. Equally, the industry must start to think about how we will be able to continue this good start and ultimately stand on our own two feet once stimulus is removed.”
David Brown, commercial director of LSL Property Services, comments:
“Strong price growth in May is another encouraging sign for the economy and the housing market in general. But that’s not the whole picture. Equally, it’s tougher news for anyone struggling to raise their first deposit. House prices are accelerating away from first-time buyers 60% faster than they’re lifting the finances of existing owners. First-time buyers are still facing a three-pronged attack from encroaching inflation, weak wage growth, and paltry savings rates. That’s why the rental market is taking up the slack for plenty of households, as the monthly battle to make ends meet rages on. Building a solid recovery in the housing market and the rest of the economy is vital. More homes are being built, although the market desperately needs more – especially since the latest government-backed schemes are increasing demand from buyers.”
Andy Knee, Chief Executive of LMS, comments:
“This morning’s figures illustrate an increase in house prices in all regions of the UK, with Northern Ireland experiencing its first growth year-on-year since February 2008.
“The primary issue for those looking to buy their first home is sourcing a deposit and as house prices continue to rise this chasm between buyers and renters is widening, many are resigning themselves to ‘forever rent’. Dreams of homeownership are dwindling and although we are hopeful that the government’s mortgage guarantee scheme will help to a degree, there is more focus needed in the long-term to ensure that we do not permanently become a nation divided.”
Jonathan Hopper, managing director, property search consultants, Garrington, said:
"House prices up almost 3% over the past 12 months shows the property market is heading in the right direction. Now we need to see steady, sustained growth.
"The worry is that with demand outstripping good quality supply, house prices might gather momentum. The last thing we want to see is a return to the unsustainable days of double digit growth.
"Yes, the property market is in a much healthier state, and initiatives like the Funding for Lending Scheme have played a key role in this. But the market is not out of the woods yet.
"Average prices in the capital are up an impressive 6.6%, driven by strong overseas demand. And London continues to be seen as a safe haven by international investors.
"But take London out of the equation, and the adjusted UK figures don't look quite so impressive.
"It will be interesting to see how the market fares post summer when, historically, market activity picks up and agents start seeing more prospective buyers coming through their doors."
