Increased confidence in UK property market sees average price edging up nationwide

Increased confidence in UK property market sees average price edging up nationwide

Increased confidence in UK property market sees average price edging up nationwide

Average house prices are edging up in many parts of the UK helped by increased confidence and the effect of the government’s Help to Buy scheme, according to analysts. UK house prices rose by 0.3% in June and are up 1.9% year on year while prime central London prices rose by 0.4% in June. Over the past year prices have risen by 6.9% adding to the improving outlook.

There are regional differences in price performance with those in the south of England outperforming those in the North. But there have been some notable exceptions such as Newcastle where prices have risen by 11% over the last year. New data from the Council of Mortgage Lenders also suggests that banks and building societies are starting to step up lending, with the number of mortgages advanced for house purchase at 55,900 in May, up more than 18% from May last year. Of these loans, some 25,100, or 45%, were to first time buyers, a 42% rise from May 2012 and the highest monthly lending figure since 2007.

According to the latest Residential Market Update from property firm Knight Frank this marks perhaps one of the biggest steps towards a loosening in the housing market seen since the financial crisis. ‘As first time buyers are able to access finance, and in turn buy homes, it will enable more home owners to move up the property ladder. This trend should be even more pronounced next year, when the Help to Buy mortgage guarantee is launched, which will offer support to buyers of existing homes as well as new build properties,’ said Gráinne Gilmore, head of UK residential research at Knight Frank.

Quote from : “In what is a sign of the times, more and more people are now looking to rent their property as opposed to purchasing outright, which has created a very interesting opportunity for those looking towards the property market.”

Prices in prime central London climbed again in June, and are up 6.9% on the year. However prices across the capital are performing at different speeds. Average values in the City and City Fringe are up 7.8% in the first six months of the year, outperforming the wider prime central London sector average of 3.7% whereas in Knightsbridge price growth has been more muted. The biggest monthly rise in prices in June was along the South Bank, where prices rose by 1.4%, and in Marylebone, where the value of luxury homes climbed by 1.8%. In contrast, prices in Mayfair saw no growth during the month, edging down by 0.2%.

Prime country property prices rose again in the second quarter of 2013 by 0.4%, taking the increase since the start of the year to nearly 1%. However, on an annual basis, prices are down by 1.2%, but this is the smallest annual margin since the first quarter of 2011. ‘While sentiment in the wider market remains uncertain, price growth in the key hotspots of Oxford and Ascot continues. Average values of luxury property in Scotland remained broadly stable in the second quarter,’ added Gilmore.

Average rents across the UK edged up by 0.1% in May, and are 3.5% higher year on year. ‘Recent data confirmed that the rental sector is growing in prominence, both across the capital and elsewhere, and this has helped underpin rental rises,’ explained Gilmore. But she pointed out that in prime central London the picture is slightly different as rents for luxury London houses are more sensitive to the mood in the financial sector.

Rents in the prime central London market have been falling or static for 14 consecutive months, reflecting the slowdown in the City jobs market. ‘But despite the modest dip in rent, it is worth noting that activity in the prime rental sector remains strong, and that on a longer term basis rents are still nearly 22% higher than the trough of the market after the financial crisis,’ said Gilmore.

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