UK house prices increased by 0.3% in June and were 1.9% higher than June 2012 with southern regions of England, especially London, continuing to record stronger rates of house price growth, Nationwide reports.
The gradual pick up in house price growth at the national level masks significant regional variation. The strongest performing regions are in the south of England – especially London. Indeed, house prices in the south of England were up 3% year on year in Q2, more than twice the 1.4% pace recorded across the UK as a whole in the three months to June.
In London prices were up by 5.2% year on year, taking the price of a typical home in the capital to an all time high of £318,214 – almost twice the level prevailing in the rest of the UK when London is excluded. Indeed, the gap between house prices in London and the rest of the UK is the widest it’s ever been, both in cash and percentage terms.
This divergence in house price performance across the regions has been evident for some time, and, as a result, prices in the south of England are now closer to their precrisis level than most other parts of the UK.
In the UK as a whole, house prices are still around 9% below their pre-crisis peak. By contrast, London house prices reached a new all time high, 5% above their pre-crisis level. Amongst the home nations, England has been outperforming for some time. House prices in England are currently 5% lower than their 2007 peak, while they are 13% lower in Wales, 12% Scotland and 53% lower in Northern Ireland.”
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “UK house price growth continued to gather momentum in June, rising by 0.3% over the month. Indeed, the annual rate of house price growth increased to 1.9% in June – the fastest pace since September 2010.
“A number of factors are likely to be contributing to the recent acceleration. Demand for homes has been supported by further modest gains in employment, as well as an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Signs of a modest improvement in wider economic conditions may also be playing a role in boosting buyer sentiment.
“At the same time, there are few signs that the supply of housing is improving significantly. Indeed, construction data point to a further decline in building activity in recent quarters from already depressed levels. For example, in Q1 2013 housing completions in England were down 8% compared to the same period of 2012 and around 40% below the average number of quarterly completions in 2007″.
|UK Fact File|
|Average UK House Price||£167,294|
|Annual percentage change||1.4%|
|Most expensive region||London|
|Least expensive region||N Ireland|
|Strongest annual price change||London|
|Weakest annual price change||N Ireland|
* Seasonally adjusted