House prices jumped 2 per cent year-on-year in July 2012, according to the latest figures from the Office of National Statistics (ONS).
It follows a 2.3 per cent increase year-on-year last month. However, England propped up the rest of the UK, with a 2.4 per cent increase, compared to a 0.2 per cent drop in Wales and 1.1 per cent decline in Scotland, while Northern Ireland’s prices plummeted 10.9 per cent.
However, house prices in England were likewise propped up by London, with the region’s average price jumping 5.7 per cent, with the rest of the country, excluding the South East, only increasing 0.6 per cent.
Other areas to see significant price rises include the East of England and Yorkshire and the Humber, which jumped 2.4 per cent and 2 per cent respectively.
Resilience
LSL Property Services director David Newnes said: “It is a testament to the resilience of the housing market and the important role played by cash buyers that house prices are rising annually, despite the bleak economic outlook and moribund mortgage market.
“As lending remains suppressed across the country, activity has been supported by the vibrant demand from cash investors in London, and this has filtered outwards.
“While it is highly encouraging for homeowners that house prices have risen, the downside is that it intensifies the pressure for new buyers who must save up even higher amounts for deposits, a feat made even harder by the very tight credit conditions at present.
“Progress can be made if lenders focus on offering attractive mortgage products to help support those frustrated buyers currently relying on the private rented sector, which would drive activity right up the property chain.”
Don’t look bad
Legal & General Mortgage Club managing director Ben Thompson said: “Given how difficult the last year has been in terms of the economy and wider Eurozone instability, these figures don’t look too bad at all. It appears as though barring future major shocks to the system prices have broadly stabilised, although there is a very regional picture.
“It may be a while before consumer confidence picks up in earnest, however when it does, we should see these figures improve a bit, as there currently remains a lack of relevant housing stock for sale.
“Historically, when we have seen prices stabilising and rising, and renting being more expensive than buying, tenants and those living with their parents wanted to take the plunge and buy. However, with low confidence levels and a lack of genuine mortgage finance for first time buyers being truly available, we are into un-chartered territory. It will be interesting to see how the next few years unfold as they will probably determine the shape of housing tenure in the UK for years to come.”
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