Building Finance News:-Average house prices in the UK rose by just 2.5 per cent in December 2018 held back by an annual fall in London prices of 0.6 per cent, reveal Office of National Statistics data.
Building Finance by HZA
The 2.5 per cent rise in December brings the average price of a house in the UK to £230,776. The modest increase was 0.2 per cent lower than November’s 2.7 per cent rise.
London had the lowest house price rise of just 0.1 per cent, although the average house price of £473,822 is still streets ahead of anywhere else. Bank of England figures show mortgage approvals for house purchases edged down further in December reaching an 8-month low of 63,793.
EY ITEM Club chief economic advisor Howard Archer, said: “The fundamentals for house buyers currently remain challenging. Consumers have faced an extended squeeze on purchasing power, which is only gradually easing. In addition, housing market activity remains hampered by fragile consumer confidence and a limited willingness to engage in major transactions.”
Regions See Prices Surge
But there was positive news outside London with average prices in the West Midlands growing by 5.2 per cent over the year bringing the average price tag for a home to £200,388.
The largest annual price growth was recorded in Northern Ireland, increasing by 5.5 per cent over the last quarter of 2018, bringing the average house price to £136,669. However, the region is still one of the cheapest places in the UK to live.
The average price in Wales increased by 5.2 per cent over the year to £161,845 while Scotland saw house prices increase by 2.4 per cent bringing the average cost of a home to £148,711.
Strong Salary Growth a Positive Indicator
Archer said recent real earnings growth, which looks set to continue in 2019, was a positive indication.
“High employment is also supportive for the housing market while mortgage interest rates are still at historically low levels and still will be assuming that the Bank of England does raise interest rates gradually and to a limited extent. ”
He also predicted suppressed house prices were unlikely to continue given the current shortage of houses for sale. RICS survey data shows new instructions falling for the sixth month running in December and for the 19th time in the last two years.
The government’s commitment and extension of the help-to-buy scheme is also seen as a positive sign with developers in a good position to access building finance for such projects.