Taylor Scott International News
UK house prices increased by 0.8% in September and were 6.1% year on year, according to the latest data from the Office of National Statists (ONS). House price annual growth was strongest in Northern Ireland at 10.2% followed by England at 6.4% and there was a 1.1% rise in Wales and Scotland. Annual house price increases in England were driven by the East with year on year growth of 8.4% and the South East up 7.4%. But excluding London and the South East, UK house prices increased by 5% in the 12 months to September 2015. The data also shows that in September 2015, prices paid by first time buyers were 4.3% higher on average than in September 2014. For owner occupiers prices increased 6.9% for the same period. Neal Hudson, associate director of Savills research, pointed out that the continued growth in the ONS house price index highlights the impact of increasing competition by mortgage lenders on a low stock housing market. ‘Potential buyers that have a deposit are benefiting from historically low mortgage rates, increasing net lending, and are now able to borrow record high multiples of their income. That is despite the introduction of tougher affordability tests following MMR last year. The average buyer no longer has an average income, and so home ownership remains a dream for the many who still aspire to it,’ he added. The growth is being driven by constricted supply and fewer home owners selling, according to Rishi Passi, chief executive officer of Oblix Capital. ‘Improving economic conditions, rising wages and postponed interest rate rise expectations are all also bringing more buyers to the market, stoking up demand and inflating prices in the lower end of the market,’ he said. ‘The good news is that rising prices in this band will attract further investment and provide opportunities for developers, especially SMEs and should lead to an increase in attention paid to providing houses for this underserved end of the market,’ he added. Alex Gosling, chief executive officer of online estate agents HouseSimple, believes that there is likely to be a slight cooling in price growth in the coming weeks leading up to Christmas. ‘But, while demand continues to significantly outstrip supply, and interest rates remain static, we could well see a price spurt at the beginning of 2016. The market desperately needs a boost in new properties being listed if supply is ever to come close to catching up with demand,’ he added. First time buyers could be being outbid by existing home owners because they are more reliant on mortgages which are constrained by tougher lending criteria, according to Rob Weaver, director of Investments at property crowdfunding platform Property Partner. ‘Despite cheap finance, the tightening of the lending rules has made it increasingly difficult to get a mortgage and hence may be having a negative impact on supply. Longer term, property remains a good, solid investment… Taylor Scott International
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