SEPTEMBER 17, 2014 | BY A & S Property
Industry reacts to 11.7% house price increase announced in latest ONS Index
Yesterday the Office for National Statistics (ONS) released its House Price Index (HPI) for July, with the headline figure being that house prices in the UK increased by 11.7% in the year to July.
Average property prices in six UK regions, the East Midlands, West Midlands, South West, London, East England and South East, are now higher than their pre-financial crisis peaks.
Other highlights of the latest figures included that the ONS has declared annual house price inflation as 12% in England, 7.4% in Wales, 7.6% in Scotland and 4.5% in Northern Ireland, as well as the statistic that prices paid by first-time buyers are now 13.5% higher on average than in July last year.
A number of property industry insiders have had their say on the latest figures from the ONS:
Commenting on the value of London’s property market, Andrew Bridges, managing director of London estate agents Stirling Ackroyd, said: “In total, London property is now worth £1.5 trillion, or almost four times as much as all the residential property in Scotland combined.”
“Delving deeper into London’s property market reveals the true reason behind the city’s sustained growth. And it’s about jobs. From fresh start-ups to likes of Amazon’s brand-new headquarters, new industries aren’t just leading London – or even the country – they’re leading the world. The Olympics showed the world the true potential of East London, and now Silicon Roundabout is demonstrating its value as a new focal point for this city. With no end in sight for the East’s regeneration, we anticipate London’s property value to soar further as more flock to newly found parts of the city,” he added.
Matt Hutchinson, director of flat and house share site SpareRoom.co.uk, said: “Month after month, the ONS house price index feels like deja vu. Prices are rising almost inexorably. For Britain’s burgeoning population of renters, it's a bleak future, as their aspirations of home ownership slip further away.”
“Almost a fifth of flat and house sharers have given up on owning property altogether and have resigned themselves to a life of renting. Attitudes to renting long-term will have to change as Britons move further away from being able to own their homes.”
He added that Brits may have to take lessons from their European counterparts who are used to a lifetime approach towards renting.
David Newnes, director of Reeds Rains and Your Move estate agents, stressed the importance of looking beyond the capital to see what is going on around the rest of the UK.
“Peeling back the regional layers gives a much more informed view of the core reality of the current market. According to our own research, house price growth slowed across all regions except for London, the South East and East Anglia in July. While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth,” he observed.
Adding: “Further afield, it is critical that support mechanisms like Help to Buy aren’t dismantled. Compared to the nadir of 2008-2012, activity in the housing market has improved, but is not completely out of the woods yet, and still needs to recapture some of the vitality of its pre-recession health.”
Andy Knee, chief executive of conveyancing specialist LMS said that pressure on first-time buyers is by no means diminishing.
“With evidence that first-time buyers are paying more and more for property, an interest rate rise now anticipated for spring next year will bring affordability into the spotlight again and, for many, will add greater pressure to household finances,” he said.
“Failure to address the critical housing shortage only adds to this and needs to be countered if first-time buyers want to stand a realistic chance of stepping onto the property ladder. Although Help to Buy has encouraged more building and is a step in the right direction, it does not go far enough to reduce the impact limited supply is having on driving up prices,” he concluded.