“Modest dip” in UK house prices

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Houses

The UK house price index level (184.9) has dropped back slightly from the peak last month (186.0), the Office for National Statistics (ONS) has reported.

However, annual UK price growth has continued to increase due to larger falls in property prices in September 2012.

In the 12 months to September 2013 UK house prices increased by 3.8%, up from a 3.7% increase in the 12 months to August 2013.
House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average.
The year-on-year increase reflected growth of 4.2% in England and 1.4% in Wales, offset by falls of 1.1% in Scotland and 1.5% in Northern Ireland.

Annual house price increases in England were driven by London (9.4%), the South East (4.0%) and Yorkshire and The Humber (3.0%).
Excluding London and the South East, UK house prices increased by 1.4% in the 12 months to September 2013.

On a seasonally adjusted basis, UK house prices were unchanged between August and September 2013.

In September 2013, prices paid by first-time buyers were 5.3% higher on average than in September 2012. For owner-occupiers (existing owners), prices increased by 3.2% for the same period.

Alexander Gosling, director of the low cost online estate agents Housesimple.co.uk, said: “Just a month after the ONS measure of house prices hit its highest level since the survey began 45 years ago, September’s modest dip will do little to stop its steady float skyward.

“The annual rate of house price growth crept up in September – and in a hint of inflationary pressure to come, prices paid by first-time buyers were 5.3% higher than at the same time last year.

“Property market demand was resurgent even before the Help to Buy scheme launched, and it is now being fanned by a combination of buyer confidence and people’s fear that if they don’t buy now they will be left behind.

“But look deeper and you’ll see that a fundamental mismatch between demand and supply is driving up prices. This is artificially propping up house values, and many buyers are gambling on an economic recovery that is by no means in the bag.

“Today’s buyers need to buy with one eye on the future path of interest rates, especially given the news that CPI inflation has fallen sharply. Buyers shouldn’t roll over when faced with rising asking prices.

“There’s huge momentum in the property market, but it’s disproportionate relative to the momentum in the economy.”

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