UK house prices increased fractionally by 0.4% in March, up 9.5% on March 2013 but still hovering around 3% below their 2007 peak.
Robert Gardner, Nationwide’s Chief Economist, believes that there is little doubt that the recovery in the housing market is now firmly established, with activity levels picking up and house prices recording their fifteenth successive monthly increase in March.
“There are some tentative signs of moderation, with the monthly pace of price growth slowing to 0.4% in March down from 0.7% in February and 0.8% in January. Nevertheless, viewed in annual terms, price growth is continuing to run at a robust pace, with the price of a typical home 9.5% higher than in March 2013.
Record low mortgage rates, improved availability of credit and the brighter economic outlook are all leading to increased demand for housing. However, the upturn in the supply side of the market continues to lag far behind, with the number of new homes being built in England still around 40% below pre-crisis levels (and this was already insufficient to keep up with the increase in the number of households being formed).
All UK regions saw annual price rises in Q1 2014. Most still remain below 2007 peaks. However, as usual, London continues to lead, with annual price growth of 18% in Q1
Robert Gardner said:
“The price of a typical UK house rose by 2.6% in Q1, after allowing for seasonal effects. Prices were up 9.2% compared with the same quarter of 2013. Although all regions saw annual house price growth in Q1, ten of the thirteen regions have yet to surpass their pre-crisis peaks. London, the Outer Metropolitan and the Outer South East are the exceptions.
Annual house price growth continued to surge in London, rising to 18% in Q1, the highest growth rate since Q1 2003. Prices in the capital are now 20% above their 2007 peak, with the price of a typical London home at £362,699. Prices in Northern Ireland were up 5.4% year-on-year in Q1, although average prices are still around half the level prevailing in late 2007. Scotland saw a 7.6% annual increase in prices, the strongest pace of growth since Q4 2007. Wales was one of the few regions to see a slowing in annual price growth, from 6.1% in Q4 to 5.2% in Q1.
Amongst the English regions, the South continued to outperform the North. Outside of London, the Outer Metropolitan area was again the strongest performing region, with annual price growth of 10.6%, whilst the North continued to be the weakest English region, with prices up 5.9% over the year.”
Courtesy of Financial Adviser