House price growth remains subdued across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling. The year-on-year increase reflected growth of 2.5% in England and 0.8% in Wales, which were offset by a decline of 1.1% in Scotland and 8.5% in Northern Ireland.
Annual house price increases in England were driven by a 5.0% rise in London and a 3.0% increase in the South East - in fact, excluding the quickly-growing London and the South East, UK house prices increased by just 0.8% in the 12 months to November 2012.
On a seasonally adjusted basis, UK house prices increased by 0.5% between October and November and prices paid by first-time buyers were 2.7% higher on average than in November 2011. For owner-occupiers (existing owners) prices increased by 1.9% for the same period.
Andy Knee, Chief Executive, LMS, comments:
“Today’s ONS statistics reveal a two-speed housing market with London and the South East providing much of the impetus behind the 2.1% year on year increase. So while this is good news for some, homeowners in Scotland (-1.1%) and Northern Ireland (-8.5%) are likely to have concerns about what the future might hold.
“However, the early indications are that 2013 is likely to be a more positive year for homeowners than 2012 – including those wishing to remortgage. Indeed, we have seen a significant number of excellent value deals for those with low LTVs and anticipate that as much as £10b will be pumped into the mortgage market as lenders who have taken advantage of the Funding for Lending scheme are forced to demonstrate increased loan availability for consumers.”
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“Today’s figures from the ONS tally with the overall growth in the value of house purchase applications we have seen in MAB’s National Mortgage Index over the last twelve months – and it is especially significant that ONS shows prices paid by first-time buyers rising at a greater rate than the overall average [2.7% compared with 2.1%].
“In the year to December 2012, the Index has shown a 13% increase in average purchase deposits to £64,325, along with a 9% rise in average purchase mortgages to £150,427. Regionally, we have also seen the growth driven by purchase business in London and East Anglia. But with the national average loan to value for house purchases hovering around the 70% mark, it shows a greater amount of upfront capital is needed by potential buyers as well as increased access to lending – which has real implications for first-time buyers.
“The fact that cheaper deals are already appearing in January, with more flexible products to help first-time buyers put forward deposits of just 5%, is welcome news that should help to boost mortgage activity. We are also seeing some of the best fixed rates on offer since the summer of 2007, so with more funding to come from the Bank of England via the Funding for Lending Scheme, it looks like being a busy year ahead.”
David Brown, commercial director of LSL Property Services comments:
“Seasonally adjusted figures show a fairly flat market at the end of 2012 – and when you discount London and the South East, where the concentration of equity rich borrowers is greatest, the rest of the UK is far from buoyant. The concern remains that first time buyers are bearing a greater burden than those who already own homes. With high inflation eating into first-time buyers’ ability to save, and pretty miserable savings rates on offer at the present we will continue to see strong demand for the private rented sector. Time will tell if the Funding for Lending scheme and innovative deals like the Springboard product announced last week by Barclays will help more first time buyers out of the private rented sector and into home ownership this year.”
