House price growth remains relatively stable 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 2.4% in England and 0.9% in Wales, which were offset by declines of 0.2% in Scotland and 5.4% in Northern Ireland.
Annual house price increases in England were driven by a 5.5% rise in London and a 3.0% increase in the East. Excluding London and the South East, UK house prices increased by 1.2% in the 12 months to January 2013. On a seasonally adjusted basis, UK house prices fell by 0.7% between December 2012 and January 2013.
In January 2013, prices paid by first-time buyers were 2.0% higher on average than in January 2012. For owner-occupiers (existing owners) prices increased by 2.2% for the same period.
Jonathan Hopper, managing director of property search consultants Garrington, said:
"These figures suggest that the housing market is in far better health than it was a year ago, with North Ireland and Scotland the only regions that have seen negative price growth in the past 12 months. Drill down into the detail though, and it's clear that the UK property market remains very fragmented. As hard as it might be to believe if you live in London, there are still many areas of the country that are experiencing price falls.
"London price growth remains streets ahead of anywhere else in the country as foreign buyers are still attracted to the capital as a safe investment opportunity. Sterling's decline should only serve to continue this trend during 2013. It's fair to say that London looks set for another year of solid, perhaps even market-defying, growth.
"Although average house price figures dipped slightly in January, this won't be a cause for concern. From the activity we are seeing from prospective buyers, the next few months should see buoyant sales. It's also highly encouraging to see first time buyers return to the market. If this trend continues, the market as a whole will strengthen."
Mary-Anne Bowring, managing director of the chartered surveyors Ringley, commented:
“After years of directionless drift, cautious confidence - and logic - are slowly returning to the property market. This morning’s Rightmove data showed that March’s asking prices have crept above their pre-crash levels. Where asking prices lead, so sale prices will follow. Or at least they should in a functioning market. But for much of last year the market was anything but that. With low confidence dragging down prices outside the South East, and London prices being inflated by an influx of foreign money, it was deeply dysfunctional.
“But today's ONS data shows that in the 12 months to January, English house prices outside London inched up too. East Anglia in particular posted some solid growth, and while there were falls in Scotland and Northern Ireland, overall growth outside the South East managed a respectable 1.2% increase.
“The impact of the Funding for Lending Scheme is clearly telling – more mortgage products are becoming available and there is a genuine price war going on between lenders. While buy-to-let investors are at the vanguard of the market’s slow renaissance, first-time buyers are returning too.
“A shortage of good quality stock is artificially inflating prices in some areas, but there is nothing like the reappearance of sold signs to encourage both buyers and sellers to get off the fence. With a modest increase in both supply and demand, the market is slowly starting to work as it should.”
Ben Thompson, MD Legal & General Mortgage Club reacts to the latest ONS house price index:
“It may seem to many that the housing market is a mixed bag at the moment. Although credit and gross lending remain constrained, there are still plenty of positive indicators. Affordability is likely to improve in the near future and 26% of consumers expect the housing market to be “better” or “much better” in 12 months’ time. This is supported by the latest ONS figures, which show a firming in house prices across the UK. Confidence is slowly but surely returning to the market, helped by both the FLS and the increased number of products now available to buyers. Whilst we are on the road to recovery, it is still vital that the importance of the housing market to the economy is recognised in the Chancellor’s Budget. Whether Mr Osborne relaxes stamp duty, introduces mortgage insurance or another form of innovation, the recovery in the housing market it still fragile, and needs as much support as possible to ensure it continues.”
