House price increases slow in run up to the General Election
The latest Office of National Statistics (ONS) House Price Index figures have been released for February 2015. The main points for conveyancers to note from this latest data are:
- 1.2% decrease in UK house price annual rise in the year to February 2015 compared to the year to January 2015– now at 7.2% increase.
- Excluding London and South East, UK annual house price increase is at 5.9%
- Yearly house price growth is appearing to slow in many regions across the UK.
- Greatest price increases witnessed in England were in the East (10.7%) and London (9.4%)
- 7.4% increase in prices paid by first time buyers compared to the same period last year.
- 7.2% increase in prices paid by existing property owners compared to the same period last year.
Though the percentage of house price increase is slowing, the first time buyer market remains strong, so conveyancers should be making the most of this integral section of the residential property market.
The General Election is likely to be playing a key role in the slowing of market inflation, as many home buyers are wary of the changes that could occur in coming months.
Andy Knee, Chief Executive of LMS, comments:
“We should be past winter’s seasonal lull by now, so it appears the General Election is contributing to this extended calm in the housing market. This is also obvious in other elements of consumer spending, as historical zero inflation continues month-on-month. The tranquil mood is likely to continue into spring and a bounce back in the property market now only appears possible following the outcome of the election.
“House price growth has slowed in recent months, but first-time buyers are far from reaping the rewards from this, with latest figures showing the value of loans to first-time buyers fell 13% year-on-year. News from the Conservative manifesto announcing a return to the Right to Buy policy will do little to quell first-time buyer concerns. Supply remains at the heart of the issue and failure to tackle this head-on will do little to ease the challenges hopeful first-time buyers face.
“Remortgaging also experienced a dip in February – down 16% from January and down 14% year-on-year, a little perplexing given there has never been a better time to access historically low rates. Prospective remortgagors should shop around for better deals now before any upswing in the market drives up rates.”