Confidence rises in SE housing market

Julia Rampen
Written By:
Julia Rampen

UK house prices increased 2.1% year on year despite declining prices in Scotland and Northern Ireland, according to the latest 2012 data from the Office of National Statistics.

Growth was concentrated in the South East of England and London, where prices rose by 3% and 5% respectively in the twelve months to November 2012. By contrast, Northern Ireland saw prices decline by 8.5%. Excluding London and the South east, UK prices only increased by 0.8%.

The divide was reflected in homeowners’ predictions for 2013. While nearly two-thirds of those surveyed by Zoopla expected prices to grow in the New Year, London homeowners were the most bullish while Scots were the least confident.

LSL Property Services commercial director David Brown said when London and the South East were discounted, the rest of the UK was far from buoyant: “The concern remains that first time buyers are bearing a greater burden than those who already own homes. With high inflation eating into first-time buyers’ abilities to save, and pretty miserable savings rates on offer at the present we will continue to see strong demand for the private rented sector.

“Time will tell if the Funding for Lending scheme and innovative deals like the Springboard product announced last week by Barclays will help more first time buyers out of the private rented sector and into home ownership this year.”

A RICS survey of chartered surveyors also highlighted hopes for 2013, with more surveyors saying they expected transactions would rise rather than fall over the next quarter.

Mortgage Advice Bureau head of lending Brian Murphy said the ONS statistics tallied with his organisation’s own observations: “The fact that cheaper deals are already appearing in January, with more flexible products to help first-time buyers put forward deposits of just 5%, is welcome news that should help to boost mortgage activity. We are also seeing some of the best fixed rates on offer since the summer of 2007, so with more funding to come from the Bank of England via the Funding for Lending Scheme, it looks like being a busy year ahead.”