London house prices have once again stormed ahead of the rest of the UK, increasing by 17.7 per cent in the year to February, according to the latest figures from the ONS (Office of National Statistics).
Overall, prices grew by an average of 9.1 per cent in the 12 months to January 2014, up from 6.8 per cent in the year to January.
However, excluding London and the South East, UK house prices increased by a more moderate 5.8 per cent in the 12 months to February 2014.
House price annual inflation grew by 9.7 per cent in England, 5.3 per cent in Wales, 2.4 per cent in Scotland and 2.8 per cent in Northern Ireland.
On a seasonally adjusted basis, average house prices increased by 1.9 per cent between January and February 2014.
In February, prices paid by first-time buyers were 10.5 per cent higher on average than in February 2013. For owner-occupiers (existing owners), prices increased by 8.6 per cent for the same period.
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), comments:
“While prices have clearly risen, the measurement is often skewed by London data. The property market in London has always run by its own rules and is not representative of the country as a whole, so leaving this region out of the equation reveals a far more measured yearly house price increase.
“Consumers concerned that they will be priced out of the housing market can be comforted by the fact the Mortgage Market Review (MMR), which comes into play next week, is expected to cool the market and dampen overenthusiastic growth. Mortgage applications are likely to take longer initially as lenders and brokers get to grips with new systems, effectively limiting the number of applications that can be processed. Tighter lending restrictions will mean consumers are only approved for mortgages after detailed affordability checks, ensuring mortgage borrowing is sustainable in the long-term.
“However, what urgently needs to be addressed is the fact that housing supply is lagging far behind demand. The extension of the government’s Help to Buy equity loan scheme should give builders the impetus to ramp up production of new homes, while investment in recruitment and materials will also help to get Britain’s new-builds back on track.”
Loading ...