After a seasonal dip in August UK average property prices are up 1.5% on the month and 6.8% annually to £202,580, a protraction of the steady upward trend since April of this year according to the latest Haart National Housing Market Monitor.
Average property prices are now at their highest since their peak of April 2012.
Property prices continue to rise due to the ongoing discrepancy between property supply and buyer demand.
New buyers coming onto the market across the UK are up 32% annually and 0.6% on the month whereas the number of new properties for sale is down 2.4% on the month and only up slightly on an annual basis (0.6%).
The property market is a hive of activity with sales transactions up 15.7% annually and 1.9% on the month. The annual rise in sales transactions in September 2013 is the highest that we have seen since before April of this year.
First time buyer property prices are also on the rise, 2.4% on August 2013 and 1.8% annually.
High first time buyer demand (their registrations are up 69.5% annually) and limited suitable properties is the reason for this. More homes need to be available to moderate these rises, which can be done in two ways: more building and also second time buyers putting their home on the market. The second phase of the Help to Buy scheme, launched last week, will encourage second-steppers to sell by reducing the deposit they need to provide to only 5%.
First time buyer deposits have also increased 2.4% on the month and 3.2% annually but respite for the first time buyer similarly comes with the second phase of Help to Buy allowing them to lay down a 5% deposit.
First time buyers now represent 41.1% of all mortgages written (up 6.8% on last year). Demand from first time buyers will only increase due to the second phase of Help to Buy. Again, this further phasises how integral property supply is during this period of rapid economic recovery.
London continues to operate its own micro-economy with first-timebuyer registrations up a staggering 87.3% annually and new buyers up 56.3% annually. The deficit of property available is even more exaggerated in the capital with new properties for sale down 6.6% annually. Sales, while up 10.3% annually, are down -1.1% on August 2013 as lack of supply suppresses the number of successful sales transactions.
The average property price in London now stands at £414,806 (over double the UK average) and is up 3.8% on the month and 13.1% annually. Prices in the West and South West of London far outstrip the London average and both are seeing considerable property price inceases and significant annual transaction rises.
Paul Smith, CEO of haart, with a network of over 100 branches, comments:
“The recovery of the property market across the UK is persisting into the autumn with new buyers continuing to enter the market up 32% annually with first time buyers up 69.5%. Property prices are up 1.5% on the month in September since the summer. The housing market is a hive of activity and we have already predicted that transactions will rise 10-15% over the next 12 months. Our most recent data shows that this is already historically true over the year ending September 2013.
“Cameron’s advanced launch of the second phase of Help to Buy is a daring response to all those sceptics who wax lyrical about the impending ‘housing bubble’. The new Help to Buy scheme will boost demand for homes by reducing a required deposit to 5%. This is a huge help to first-time-buyers who are unable to step onto the property ladder, but the influx of demand will also encourage second-steppers to put their home on the market as they will be further buoyed by the 5% deposit where they lack equity to move up. This extra feed of property will ease the current log-jam of supply.”
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