House prices soared by 9.6% in the year to March 2015, up from 7.4% in the previous month, the Office for National Statistics (ONS) revealed.
This is the first time the annual growth figure has risen since last summer. From September 2014, yearly property price inflation decreased slowly every month, from a record high of 12.1%.
However, the most recent increase was not caused by the spiralling London housing market as it was last summer. This year, Scotland experienced the fastest price rises of 14.6% in March.
The East of England was second at 11.4%, and then the South East and London with 11.2% growth.
Not including London and the South East, UK property prices rose by 8.1% in the year to March 2015; much higher than usual growth, indicating that values are strengthening around the country.
This increase made the average house price £273,000 in March, found the ONS data. This is £4,000 higher than February and only £1,000 off the sky-high value recorded
in August 2014.
Annual property price growth was 9.4% in England, 5.7% in Wales and 7.5% in Northern Ireland. Scotland’s huge 14.6% increase was the highest yearly rise north of the border since July 2007.
The boom in March has caused some regions of the country to witness record high house prices, including the East of England, East Midlands, West Midlands, South East and South West.
London’s values are still slightly less than the prices seen in August 2014.
But now that the general election is over, prices could be pushed up higher in the next few months. The ONS index is a month behind other studies.
Managing Director of online estate agent House Tree, Tom Harrington, says: “The ONS data is pretty historic, as the housing landscape has changed dramatically since March.
“Now that the general election is out of the way, and all the uncertainty surrounding it, which saw buyers and sellers alike sit on their hands, the handbrake has been released on activity and confidence.”1
Chief of online estate agent House Simple, Alex Gosling, says: “Buyer interest has picked up noticeably in the past week. We will have to wait and see if this is just a slingshot effect of the general election. The issue over the past few months has never really been about demand, because the buyers have always been there.”1
The Halifax’s latest monthly property index revealed the average house price is now a record £196,412, up £3,084 compared to March this year, when prices had risen by a slower monthly rate of 0.6%.
Annually, prices were up 8.5% in the three months to April, compared with 8.1% growth in the three months to March.
A separate study by the Council of Mortgage Lenders (CML) indicates that in the first quarter (Q1) of 2015, first time buyers took out 61,300 mortgage loans, a decrease of 24% from Q4 2014 and 11% down on Q1 2014.
Those moving home took out 70,400 loans, a 25% drop on Q4 2014 and a fall of 11% yearly.
Chief of mortgage broker SPF Private Clients, Mark Harris, says: “Mortgage lending got off to a slow start this year, but started to pick up by March and with the uncertainty created by the election now resolved, we expect that trend to continue.”1
The ONS found that in March, first time buyers paid 7.8% more for their property than a year previously. This rose by 10.3% for existing homeowners.