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House prices rise over the year as London records lowest annual growth

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23/05/2019
UK house prices rose over the year to March, with London recording the lowest annual growth, according to the Office for National Statistics (ONS).

Meanwhile, UK Finance found there was no further slowdown in the London market in Q1 2019, with the number of mortgages completed for home purchase virtually identical to Q1 2018.

According to the ONS, average house prices across the UK rose by 1.4% in the 12 months to March 2019, up from one per cent in February 2019, standing at £227,000.

The report found that on a seasonally adjusted basis, average house prices in the UK increased by 0.1% between February and March this year.

On a non-seasonally adjusted basis, average house prices in the UK fell by 0.2% between February 2019 and March 2019, compared with a fall of 0.6% in average prices during the same period a year earlier.

Prices up in England and Scotland

The average house price in England increased by 1.1% over the year to March, up slightly from one per cent in February 2019, with the average house price in England now £243,000.

House prices in Scotland increased by 3.3% in the year to March this year, up from 0.5% in the year to February, with the average house price in Scotland now £149,000.

House price growth in Wales, increased by three per cent in the year to March 2019, down from 3.6% in February 2019 with the average house price at £159,000.

Northern Ireland house prices increased by 3.5% over the year to Q1 2019, remaining the cheapest UK country to purchase a property in, with the average house price at £135,000.

London at lowest annual growth

Yorkshire and the Humber showed the highest annual growth, with prices increasing by 3.6% in the year to March 2019, followed by the West Midlands at 3.4%.

The report found that the lowest annual growth was in London, with prices falling by 1.9% in the 12 months to March 2019, up from a fall of 2.7% in February 2019.

This was followed by the North East where prices fell 0.8% over the year.

However, London remains the most expensive place to purchase a property, at an average of £463,000.

This is followed by the South East and the East of England, at £318,000 and £287,000 respectively.

The North East continues to have the lowest average house price at £123,000 and is the only English region yet to surpass its pre-economic downturn peak.

More confidence for property purchases

Tomer Aboody, director of property lender MT Finance, said: “While prices fell 1.9 per cent in London, this was a better performance than the previous month’s figure of 2.7 per cent, suggesting that there is more confidence and people willing to proceed with their property purchases.

He added: “Elsewhere, growth in property prices in the Midlands and north of the country shows confidence in projects like HS2, which will one day get off the ground. The north-south divide is narrowing with increased ability to travel between the regions for work and it means that it may be possible to live in cheaper parts of the country.

“The appeal of greener pastures and a better standard of living will mean those areas will go up in value and benefit from the investment of people on higher salaries moving out of London.

“The government’s focus on London and the southeast has always been highly questionable and there is nothing wrong with living a bit further out, particularly when many people have been priced out of the capital perhaps forever.”

UK Finance’s regional data

According to the latest regional data released by UK Finance, London saw a rise of 1.6% in the number of first-time buyer mortgages in Q1 2019 compared with the same period a year ago, standing at 9,410.

Additionally, there were 5,980 new home mover mortgages completed in London in Q1 2019, 3.7% fewer than in the same quarter in 2018.

There were 14,170 homeowner remortgages completed in London in Q1 2019, 1.3% fewer than in the same quarter in 2018, following a period of strong growth in remortgaging in London during 2018.

Wales

In Wales, first-time buyer mortgages in Q1 2019 rose by 1.2% from Q1 2018 to 3,450.

Homemover mortgages completed in Wales in Q1 2019 increased by one per cent from the same quarter a year earlier, standing at 3,140.

Homeowner remortgages fell by 0.2% in Q1 2019, standing ay 4,810.

Scotland

First-time buyer mortgages completed in Scotland in Q1 2019 rose by 4.5% compared with the same quarter in 2018, standing at 6,760.

Additionally, there were 6,620 home mover mortgages completed in Scotland in Q1 2019, 6.6% more than in the same quarter in 2018.

There were 9,670 homeowner remortgages completed in Scotland in Q1 2019, 18.8% more than in the same quarter in 2018. This is the highest volume of remortgaging in Scotland in a decade, when 9,850 remortgages were completed in the third quarter of 2009.

Northern Ireland

There were 2,440 first-time buyer mortgages completed in Northern Ireland in Q1 2019, 11.4% more than in the same quarter in 2018.

Additionally, there were 1,490 homemover mortgages in Q1 2019, 0.7% fewer than in the same quarter in 2018.

There were 2,820 homeowner remortgages completed in Northern Ireland in Q1 2019, 24.8% more than in the same quarter in 2018. This is the highest level of remortgaging in Northern Ireland since Q1 2009, when 3,280 remortgages were completed.

FTBs are making a modest come-back in London

Mike Scott, chief property analyst at Yopa, said that the rise in the number of FTB mortgages in the capital, alongside a fall in the number of home mover mortgages, are suggesting that FTBs are making a modest come-back in London.

He added: “The average first-time buyer in London is now a 33-year-old who is borrowing £283,226, which is 65.8% of the value of the property and 3.79 times their household income, so they have a total household income (before tax) of £74,700 and have put down a deposit of £147,000.

“With average full-time earnings in London at close to £38,000, the income number is slightly less than is earned by a couple who both work full-time for average salaries, and so the deposit requirement is likely to be more of an obstacle to would-be first-time buyers.”

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