House prices rise at highest rate seen in seven months
Tuesday 15 January 2013
Two-thirds of homeowners are predicting that house prices will increase in the first half of this year, as official figures show that prices have risen at the highest rate seen in seven months.
House prices climbed by 0.5% month-on-month in November to reach an average of £232,000, showing the biggest monthly increase seen since April last year, the Office for National Statistics (ONS)'s latest house price index showed today.
On a year-on-year basis, prices were up by 2.1% across the UK. However, sharp regional variations persist and while London and the South East recorded increases of a 5% and 3% respectively, prices slid by 8.5% in Northern Ireland and by 2.4% in North East England.
Meanwhile, a separate study from property search website Zoopla indicated that homeowner confidence in the housing market has seen a rebound.
Two-thirds of 2,400 home owners (65%) in Zoopla's survey expect property prices in their area to rise over the next six months, up from 55% when similar research took place a year ago.
Just under a fifth (19%) of those surveyed expect prices to fall in the next six months, down from 29% 12 months ago.
The average increase predicted over the first half of this year is 3.2%, which Zoopla said works out at a typical rise of £7,261, based on its own valuations of house prices.
Homeowners in London, which has had strong interest from overseas buyers, are the most optimistic, with 84% predicting increases in their area over the next six months.
Those living in Yorkshire and the Humber are the least confident, with just over half (51%) predicting rises.
The ONS figures showed that year-on-year, house prices increased by 2.5% in England to average £241,000 and by 0.8% in Wales to around £157,000.
But continuing a long-standing trend of falls in Northern Ireland, prices were down annually by 8.5% to reach £128,000 and they also declined by 1.1% in Scotland, averaging £178,000.
The ONS said: "House price growth remains subdued across most of the UK."
It said that if London and the South East were taken out of its figures, UK house prices would have increased at a much lower rate of 0.8% year-on-year in November.
Bodies such as the Royal Institution of Chartered Surveyors (RICS) and the Council of Mortgage Lenders (CML) are predicting a pick-up in sales in the coming months amid recent signs of improvements to the mortgage market.
RICS suggested today that the housing market could be "over the very worst" of its difficulties.
The number of mortgage approvals for house purchase has been climbing in recent months, which has been put down to a multi-billion pound Government scheme which was launched in August to boost lending.
Mortgage lenders have slashed their rates and the number of mortgages on the market has increased strongly since the scheme began.
Zoopla spokesman Lawrence Hall said: "Homeowner confidence has re-bounded strongly from one year ago, with a significant majority now expecting to see house price increases over the first half of the year.
"While we are not yet back to the levels of post credit-crunch optimism seen in late 2009, the increased confidence bodes well for both market activity and pricing in 2013."
Here are Zoopla's regional findings when homeowners were asked what they expect to happen to house prices in their area over the next six months, with the percentage expecting falls followed by the share predicting they will be flat and the percentage expecting an increase:
:: Yorkshire and the Humber, 32%, 17%, 51%
:: West Midlands, 15%, 22%, 64%
:: Wales, 27%, 11%, 62%
:: South West, 22%, 20%, 58%
:: South East, 13%, 18%, 69%
:: Scotland, 28%, 12%, 60%
:: Northern Ireland, 22%, 11%, 67%
:: North West, 25%, 21%, 54%
:: North East, 24%, 13%, 63%
:: London, 7%, 9%, 84%
:: East, 16%, 16%, 68%
:: East Midlands, 18%, 17%, 65%
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