Average UK house price hits record high above £190k as annual property inflation picks up again
- House prices grew by 5.2% on a yearly basis in April and by 1% on March
- The average UK house price now stands at £193,048
- Homeownership rates in the UK are lower than Greece, Italy and Hungary
UK house prices have smashed the £190,000 barrier for the first time this month, growing by 5.2 per cent compared to last year, new figures suggest.
The average price now stands at £193,048, which represents an increase of £3,594 or 1 per cent on last month – the largest monthly increase since June last year, the latest figures from Nationwide Building Society show.
House price growth has been cooling since last summer, when property values surpassed their peak in cash terms in May. But this month’s rise, which is the first annual price growth since August, has pushed house prices to a new record high.
House prices: UK house prices have smashed the £190,000 barrier for the first time this month
Nevertheless, this month’s annual pace of growth is still around half the levels seen last summer, when they grew by nearly 12 per cent in June.
Robert Gardner, Nationwide's chief economist, said the pick-up in price growth had occurred even though the pace of activity in the housing market had remained ‘fairly subdued’ in recent months.
SHARE THIS ARTICLE
Last month’s Nationwide’s house price index showed prices grew at their slowest pace for seven months, although they still were 5.1 per cent higher compared to last year.
Gardner said: ‘Indeed, the number of mortgage approvals is still well below its long run average and 20 per cent below the levels recorded in early 2014.
On the rise: April's rise in house prices is the first annual price growth since August, Nationwide said
‘The strength of the economy and relatively subdued pace of activity in the housing market remains something of an anomaly.’
He added: ‘Healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the quarters ahead.’
Howard Archer, chief UK and European economist for IHS Global Insight, said that current shortage of properties coming on to the market seemed to be providing increasing support to house prices.
‘Consequently, we expect house prices to rise by around 5 per cent over 2015,’ he said.
Recent studies have showed that house price growth is spreading throughout the UK, with house prices now growing faster in 12 of the UK's largest cities than those in central London for the first time in a decade, according to Hometrack.
Richard Donnell, director of research at Hometrack, said the housing market trends now being seen in regional cities were similar to those seen in London a few years ago.
Several studies have highlighted that a lack of homes on the market as a strong factor driving up prices as buyers, despite having access to ultra-low mortgage rates, have a smaller pool of properties to choose from.
Property website Rightmove recently reported that house sellers' asking prices have reached an all-time high across England and Wales.
Jonathan Hopper, managing director of the buying agents, Garrington Property Finders, said:
‘House price growth before the May Election is somewhat of a surprise.
‘However, demand was always there even though the property market had come off the boil over the past six to nine months.’
With houses becoming increasingly unaffordable, it perhaps does not come as a surprise that homeownership in the UK has fallen and the proportion of people renting from private landlords as increased.
A nation of homeowners? The UK ranks only 11
Nationwide, which has compared the level of homeownership in the UK with the rest of Europe, said that although some other European nations have seen declines in their home ownership rates in recent years, the movement in the UK has been more pronounced.
Gardner said: ‘The UK is often characterised as a nation of home owners, though compared with our European neighbours, the proportion of the population owning their own home (either outright or with a mortgage) is not particularly high. In fact, it is actually towards the lower end of the range.’
The UK ranks only at number 11, with Hungary, Italy, Spain and Greece among the nations to have higher homeownership rates.
Even at its all-time high of 73 per cent in 2007, the UK home ownership rate was not particularly high by EU standards, Nationwide said.
Despite fewer people owning their own home, young adults in the UK aged between 18 and 34 do not continue to live with their parents as youngsters in other European nations do - although this trend has become more pronounced over the past five years.
Young Italians lived up to their stereotype as the country to have the highest share of young adults living with their parents, followed by Hungary, Greece, Portugal and Spain. The UK was again number 11 in the chart.
Living up to the stereotype: Italy has the highest share of young people living with their parents
No comments:
Post a Comment