UK house price increase slows down

Photo:   EEPaul

The ONS data shows that house prices in the UK rose 8 per cent in March 2014 year-on-year, lower than the annual increase of 9.2 per cent recorded in February 2014.

England continues to lead the way in Britain, with prices jumping 8.5 per cent, ahead of Wales (4.9 per cent), Scotland (0.8 per cent) and Northern Ireland (0.3 per cent). London, meanwhile, is still racing ahead of England’s rises, with prices leaping by an annual 17 per cent, ahead of the East of England (6.6 per cent) and the South East (6.1 per cent). Indeed, excluding London and the South East, UK house prices increased by much lower 4.7 per cent in the 12 months to March 2014.

On a seasonally adjusted basis, average house prices fell by 0.5 per cent between February and March 2014.

In March 2014, prices paid by first-time buyers were 10 per cent higher on average than in March 2013. For existing owners, prices increased by 7.2 per cent for the same period.

The slight easing in the rate of increase may come as some reassurance to those concerned the UK housing market is currently entering a bubble. At the weekend, the Bank of England governor Mark Carney said that rising house prices were the biggest risk to the country’s economic recovery.

Estate agency Marsh & Parsons attributes the first signs of cooling to the impact of the Mortgage Market Review, as well as the steps taking by the government to get more houses build, reversing the country’s chronic shortage: “The housing market is just that – a market, and by definition will self-regulate in time. We have seen a remarkably busy opening few months of the year, but price rises are steadying now thanks to a resurgence of supply and the recent Mortgage Market Review tightening affordability criteria.”

Brian Murphy, Head of Lending at Mortgage Advice Bureau, adds: “It’s welcome news that house price growth is slowing after some dizzying rises in recent months. These have undoubtedly been fuelled by the surge in the London property market. Putting the capital and South East to one side leaves us with a far more measured and controlled upwards trend. Annual growth of 4.7% will be welcome news to those who not so long ago were caught in an equity trap and the victims of a stagnant market.”