The report highlighted that house price annual inflation was 7.4% in England, 1.1% in Wales, 6.4% in Scotland and 14.2% in Northern Ireland and that the growth of house prices in the UK is showing signs of slowing.
Annual house price increases in England were driven by an annual increase in the East of 10.7% and in London of 9.4%. Excluding London and the South East, UK house prices increased by 5.9% in the 12 months to February 2015.
On a seasonally adjusted basis, average house prices increased by 0.6% between January and February 2015. In February 2015, prices paid by first-time buyers were 7.4% higher on average than in February 2014. For owner-occupiers (existing owners), prices increased by 7.2% for the same period.
Peter Williams, Executive Director of the Intermediary Mortgage Lenders Association (IMLA), comments: “Slowing house price inflation in today’s ONS data for February suggests that actions taken by the Financial Policy Committee to dampen the growth of last year have done their job and put the housing market on a more stable footing for the short term at least.
Seeing annual price rises dip below an annual increase of 6% outside London and the South East is a step in the right direction to improve affordability. However, in part the slowdown has only been possible by squeezing potential buyers out of the market by restricting access to finance, creating some extra breathing space for politicians to get to grips with the fundamental supply/demand imbalance.
The Conservative pledge to extend the Right to Buy scheme is a quick win to help boost a flagging home ownership sector and stimulate turnover in a market where transaction levels are now three times slower than it was in the 1980s*. However, it carries no guarantee of greater house building as a result. The danger is that it will weaken the future capacity of the social renting sector to provide a safety net for those who cannot afford to house themselves via the private market.
The risk is that in this manifesto along with others we will get more short term initiatives and that politicians will continue to avoid owning up to the need for a fully formed housing strategy that balances support for people across all forms of housing tenure. Delaying the inevitable will only result in more difficulties in the long term.”
Andrew Bridges, Managing Director of Stirling Ackroyd, comments: “Even as house price growth eased back across the UK, London has come out at the top end of the pack. It speaks volumes about the unique vitality of property in the capital, but also points to problems looming on the horizon. At the financial heart of our capital, the City seems so far undaunted by the prospect of an upcoming General Election – but London as a whole can’t take this bullish outlook at face value.
The people of London face a problem that politicians have been leaping over themselves to answer. There aren’t enough homes. But our recent research has found that the current rate of planning permissions will only allow for around two-thirds of London’s 40,000 target to be hit. The Conservative announcement this morning of a £1bn fund to clean up brownfield sites is one welcome suggestion, especially in the space-starved City. But more must be done – and delivered. If the capital can’t provide homes for its people, it doesn’t bode well for the rest of the country’s prospects.
Our research shows that a lack of overall control is the only really catastrophic political outcome for planning approvals in London boroughs. So for the whole UK, a lack of strong decisions and rule by coalition committee could have a similar impact on the vital housing decisions and big infrastructure projects that must be grasped after the General Election.”
