Modest Upward Movement In UK House Prices

Figures released today (18 September) by the Office for National Statistics (ONS) show that UK house prices for the year to July were two percent higher across the board than 12 months ago, with an average sales price of £234,000. This was lower than the 2.3 percent gain recorded year on year in May and June and would have been lower still but for the contribution of a still-robust London market.

Away from the capital city, a solid decline was recorded in Northern Ireland – down 10.9 percent and an average price of just £130,000 – with more modest retreats in Scotland and Wales – off 1.1 and 0.2 percent respectively. In totality, England came in at a 2.4 percent gain.
According to the ONS, if London and the South East were stripped out of the figures, UK house prices would have risen by a meagre 0.6 percent in the 12 months to July.

In the capital, prices rose by 5.7 percent for the July year, to reach an average of £397,000. By contrast, the North East experienced a 0.5 percent annual decline, giving it the lowest average house price in England, at £145,000.
The latest ONS figures have done nothing to inject optimism into the British housing market. The Independent quoted one observer, IHS Global Insight economist Howard Archer, as saying: “We retain the view that house prices will trend gradually lower over the latter months of 2012 and very possibly beyond in the face of limited activity, low and fragile consumer confidence, and muted earnings growth.”
In keeping with the overall increases, prices paid by first-time buyers also climbed, according to the ONS data. At £174,000 on average, this represented an increase of 1.8 percent for the July year. For existing owners, the increase was slightly higher at two percent, with an average purchase price of £269,000.