The average price of a residential property in UK increased by 1.8% on a year ago thanks mainly to the hike in property values in London and the South East, according to official ONS data. The ONS house price index shows that home values in London appreciated by 6.3% in the 12 months to August, which was three-and-half times the UK’s 1.8% average and three times England’s 2.1% average. The next nearest rises were witnessed in the South East (+2.4%), followed by the West Midlands (1.2%). In contrast, home prices fell by 0.7% in the South West and by 0.5% in both the East Midlands, and Yorkshire and the Humber. The biggest fall was recorded in Northern Ireland, down 12.8% year-on-year.
Regional Variations in UK Home Prices
The ONS study, which lags other major reports by at least a month, is based on figures provided by the Council of Mortgage Lenders and puts the average UK home at £234,000 – significantly higher than the Land Registry’s for England and Wales. Ben Thompson, managing director at Legal & General Mortgage Club, commented: “We still have a very regional and patchy picture. “Overall though, with a few notable exceptions, following the sharp declines a few years ago, the headline figures remain flat. In reality this represents a downward drift relative to inflation, so essentially prices in real time in many areas are in decline. “Some would view this as negative however this adjustment will start to make prices look more attractive to first-time buyers who may have been renting for some time and actually want to buy when it becomes affordable to do so.”
Lenders’ Innovative Approaches
Reflecting on the latest ONS data, Paul Hunt, managing director of Phoebus Software, commented: “The housing market remains stable as we head towards the end of the year, with underlying demand supporting house prices in London and the south east in particular. Lenders are being innovative in their approach and recent efforts to deliver good value mortgage packages for first time buyers struggling to deal with tight credit conditions and extremely high deposits, are starting to come to fruition. The Funding for Lending Scheme has the potential to further boost lending levels over the next three or four months, which would set the housing market in good stead going into 2013.”
Article courtesy of Property Investor Today
