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House prices continue to be on the up

House prices continue to be on the up

Category: Mortgages

Updated: 29/01/2014
First Published: 29/01/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Two sets of figures released today show that UK house prices are continuing on their upwards trajectory, although each report reveals slightly different levels of growth.

The latest Monthly House Price Index from Nationwide shows that house prices rose by 0.7% in January with the average price now standing at £176,491 – 8.8% higher than in January 2013 when the figure stood at £162,245, and also posting the 13th successive monthly increase.

All regions in the UK saw annual price growth which would suggest that the housing market is feeling the effects of recovery nationwide, although as expected London continues to lead the way with house prices being 15% higher in the final three months of 2013 than they were the year previously.

Figures from the Land Registry's House Price Index, meanwhile, paint a slightly different picture. Although this Index also shows that prices are rising, the Land Registry has calculated a less significant annual increase of 4.4% with the average house price in December being £167,353 – up from £160,291 the previous year.

This also indicates a monthly increase of 1.1% from November 2013, while the figures again show that London saw the greatest rate of annual growth by posting a year-on-year increase of 11.2%.

Despite these rises, however, the Nationwide Index shows that house prices are still an average of 4% lower than the peak levels seen in 2007, which could perhaps constrain some of the fears around excessive price rises. The improvements to the housing market are thought to be on the back of increased employment, record low rates and improved confidence in the sector, with industry experts expecting this trend to continue.

However, they also offer a word of caution – with rates expected to rise in the not-to-distant future, it means affordability could become even more of an issue. Sylvia Waycot, editor of Moneyfacts.co.uk, comments:

"The last thing anyone wants is for the home they've longed for to become a burden. That is why an honest assessment of how you would cope if interest rates rose by one or two percent is needed. These days that is a part of the mortgage approval system but if you already own your home, now is the time to plan for 'what if's' – so you know where you would make any cuts to lifestyle if you needed to always, hoping of course, that you won't."

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