House prices in the UK rose by 3.3% in the second quarter (Q2) of 2015 compared to Q1, making the average price now £200,280, according to the latest property price index.
This indicates that the quarterly rate of change has picked up after two consecutive drops and prices in Q2 were 9.6% higher than the same quarter last year, revealed the Halifax data.
This was greater than May’s 8.6% growth and the highest quarterly increase since September 2014 when it was also 9.6%. On a monthly basis, prices rose by 1.7% between May and June, the fourth continuously monthly increase.
The steady growth in prices arrives as home sales remain stable. Data from HM Revenue & Customs (HMRC) shows that UK home sales rose by 1% between April and May and sales in the period from March to May were 0.5% higher than in the three months before, but were 4.2% lower than in the same period in 2014.
Halifax Housing Economist, Martin Ellis, says that supply remains very short, with the stock of homes for sale currently at record low levels: “This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015.
“Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand.”1
CEO of Dragonfly Property Finance, Jonathan Samuels, adds that there are mixed signals in the property market as the latest index from Nationwide indicates that prices have dropped slightly.
He also reveals that although prices in London have slowed, house prices per square metre have increased by 45% since 2010, emphasising demand in the capital.
He says: “With economic growth stronger than expected during the first quarter, a buoyant jobs market and people generally better off, you would expect the market to continue to improve throughout the rest of 2015, if at a more moderate rate compared to recent years.”
He also says that the current Euro crisis in Greece could affect the UK property market: “We could see a flight away from equities into bricks and mortar, but at the same time if Europe as a whole is adversely affected, then the UK economy will almost certainly suffer too.”1
London prime property agency, VanHan’s Thomas van Straubenzee is predicting an influx of enquiries from wealthy Europeans hoping to move their assets from the continent into London, as they seek to avoid the Euro crisis.
He states: “We have seen interest from the Middle East and India pick up again, which is not surprising as we had noticed that these buyers were particularly affronted by the idea of a mansion tax.
“We do not see London house prices slowing down anytime soon, as demand continues to outstrip supply, particularly at the top end of the market.”1
Jonathan Hopper, Managing Director of Garrington Property Finders, claims that vendor expectations have been surpassing what buyers are willing to pay in several parts of the UK, but this over-optimism is being put in check.
“Despite mortgages being at their cheapest level for years and the supply of homes for sale being tight in many price brackets, buyers are still intensely value sensitive,” he says. “Buyer demand is strong but sensible and buyers are being much more sober in their offering behaviour than in the last boom.”
Hopper continues: “Though confidence among both buyers and sellers remains high, as the summer slowdown begins, sellers must be wary of letting their pricing ambitions run away from what the market will tolerate.”1
1 http://www.propertywire.com/news/europe/uk-house-price-index-2015070810723.html