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UK house prices continue their ascent through August/September – Issue 7

Concern of a national housing bubble is premature. While most indices report rising house prices in August/ September, outside of London and the South, prices are just beginning to register positive growth and are rising from a low base

2013 October House Price Watch Infographic

National Summary – UK house prices continue their ascent through August/September

The average monthly increase is UP 0.5% – excluding Rightmove (national house price changes over the past month range from -1.5% by Rightmove up to 0.9% by Nationwide)

The average annual increase is UP 3.6%. (national house price changes over the past year range from 1.3% by Land Registry up to 5.4% by Halifax)

Reports indicate September 2013 marks highest annual national coverage of price rises since 2007 Nationwide reports, for the first time since 2007, all 13 UK regions experienced annual house price growth in the third quarter of 2013

Demand supported by low mortgage rates — first-time buyer mortgages at highest level in 5 years  Modest economic improvement, low mortgage rates supported by official schemes such as Funding for Lending and Help to Buy are seen to be boosting housing demand in recent months. Halifax – “The relatively low level of mortgage payments in relation to income is supporting housing demand”

Regional Summary – While house prices are up in many areas, rises in London are more dramatic than those observed in the rest of the country up 1% in the past month and 7% year on year

Growth in house prices is evident in many but not all areas in the past month (declines are noted in Wales, the North East and East Anglia). London (up 1%), South West (up 0.7%) and North West (up 0.7%) experienced the biggest rises in the past month. “Nationally, the housing market could in no way be described as a bubble. The regional picture is extremely varied and we recognise how many parts of the UK are only just beginning to see the first signs of recovery.” RICS

The North/ South divide continues. London’s average house price exceeds £455,000; up 7% since August last year according to Land Registry figures.  Areas outside the South and East have an average house price below £200,000; lowest in the North East (£122,000).

Longer term affordability is a concern particularly in London and South East where the greatest mismatch between supply and demand is reported and there is a lack of housing supply. “The change in the supply of housing for sale varies on a regional basis with improving market conditions bringing more supply to the market in regions outside southern England.  This is keeping price rises in check.   In London and the South East the growth in supply remains below average and this is putting additional upward pressure on prices.” Hometrack

“While there have been encouraging signs that house building is starting to recover, construction is still running well below what is likely to be required to keep up with demand.” Nationwide

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