Key findings
- In the 12 months to May 2012 UK house prices increased by 2.3 per cent. This continues the pattern seen since May 2010, with house prices relatively stable across most of the UK although falling in Northern Ireland.
- The year-on-year increase reflected growth of 2.6 per cent in England and 3.5 per cent in Wales, which was offset by declines in Scotland and Northern Ireland of 1.0 and 10.3 per cent respectively.
- Annual house price increases in England were driven by a 7.2 per cent rise in London as well as increases in the South East and East Midlands of 3.4 and 2.3 per cent respectively. The largest decreases in England were 1.6 per cent in the North West and 1.2 per cent in the West Midlands.
- On a seasonally adjusted basis, UK house prices remain unchanged between April and May 2012.
- Prices of new dwellings rose by 6.2 per cent during the 12 months to May 2012, while the price of pre-owned dwellings increased by 2.0 per cent in the same period.
- In May 2012 prices paid by first time buyers were 2.8 per cent higher on average than in May 2011. For owner occupiers (existing owners) prices increased by 2.1 per cent for the same period.
Average house price by region
Average house prices increased in five of the nine English regions over the year to May 2012. The largest increase was in London (7.2 per cent) followed by the South East (3.4 per cent) and the East Midlands (2.3 per cent). The London increase was the largest recorded since November 2010 and the increases in the South East and East Midlands were the largest recorded since December 2010. The largest decreases were 1.6 per cent in the North West and 1.2 per cent in the West Midlands.
Average house prices in countries and regions
Average mix-adjusted house prices in May 2012 stood at £237,000 in England, £154,000 in Wales, £132,000 in Northern Ireland and £177,000 in Scotland. In May 2012, London continued to be the English region with the highest average house price (£388,000). The North East had the lowest average house price (£143,000). London, the South East and the East of England all had prices higher than the UK average price of £228,000. Excluding London and the South East, the average UK mix-adjusted house price was £183,000.
House Price Index by type of buyer
The average price for properties bought by first time buyers increased by 2.8 per cent over the year to May 2012 compared with an annual increase of 1.5 per cent in April 2012. During May 2012 the average price paid for a house by a first time buyer was £171,000. The average price for properties bought by former owner occupiers (existing owners) increased by 2.1 per cent in the year to May 2012 compared with an increase of 1.4 per cent in April 2012. In May 2012 the average price paid for a house by a former owner occupier was £262,000.
House Price Index by new and pre-owned dwellings
During the year to May 2012 prices paid for pre-owned dwellings increased by 2.0 per cent on average compared with an increase of 1.1 per cent in the year to April 2012. The average UK house price for pre-owned dwellings in May 2012 was £229,000. During the year to May 2012 prices paid for new dwellings increased by 6.2 per cent on average compared with an increase of 5.1 per cent in the year to April 2012. The average UK house price for new dwellings in May 2012 was £216,000.
Ashley Alexander, MD, estate agent review website MeetMyAgent.co.uk, said:
"After the boom years, we saw house prices fall off a cliff in 2008. Now, for the last year, we've had the calm after the storm. On the surface property prices appear stable, but this is due to low transaction volumes, a lack of housing stock and weak demand, rather than strong fundamentals.
London continues to prop up the market. Take the capital out of the equation and the picture doesn't seem quite so positive.
"Just like the British weather, activity in the property market for the rest of the summer is likely to be unspectacular. With the Olympics starting in 10 days time, agents are expecting a significant drop off in viewings as people delay their property search. The hope is that there will be a flurry of activity once the Games are over, particularly as the effects of the Chancellor's Funding for Lending kicks in, and that this will provide some much needed momentum for the rest of the year."
Nick Hopkinson, Director of PPR Estates, said:
"Monthly house sales volumes remain at less than half the levels of a functioning market. House prices in London are almost double most other parts of the UK and massively distort the average numbers. All houses are different and the mix of sales in any month makes comparatives very dubious at such low volumes. The ONS data only includes mortgaged sales from a sample of the market; the dysfunctional mortgage market distorts the data comparatives even more as the banks decline to lend to all but the most creditworthy borrowers who are likely to be buying above average priced properties. In this context, this latest report calculating average prices is simply an ‘analysts’ field day’ and doesn’t really help anyone understand the current state of the UK property market.
"Everyone knows house prices (in real terms) are falling almost everywhere at the moment except the most expensive London postcodes. The latest forward looking data this week indicates asking prices are finally on the way down as increasingly desperate seller
