House prices in most areas of the UK have risen over the past year, however data from HM Land Registry reveals that some areas – including London – have seen house prices drop recently.
According to the latest HM Land Registry’s UK House Price Index, the average property price in the UK in March 2019 was £226,798, an increase of 1.4% year-on-year. On a regional basis, the area that saw the biggest rise in house prices was Yorkshire and The Humber, which saw an annual increase of 3.6% in the year to March. Northern Ireland was next with an increase of 3.5%, followed by West Midlands 3.4%, Scotland 3.3% and Wales 3.0%. Not all areas saw an increase, however, with property prices in London seeing the biggest decrease at 1.9%, followed by the North East (-0.8%) and the South East (-0.4%).
The Bank of England has stated in its May 2019 inflation report that activity in the housing market has remained slow, with several factors contributing to this, including economic uncertainty, affordability constraints and changes in policy for buy-to-let mortgages reducing demand. In addition, an increase in housing supply may have also affected house prices. Furthermore, the Bank of England’s Money and Credit release revealed that the overall number of mortgage approvals for purchasing a home fell by around 3,000 in March 2019, to 62,300.
The reduction in demand shown in fewer mortgage approvals in March has seen increased competition from mortgage lenders to attract borrowers. This intense competition can be seen in the reducing rates across all loan-to-value (LTV) categories, but particularly marked at the 90% and 95% LTV tiers, where lenders at seeking to attract first-time buyers and in the increasing levels of incentives being offered to lure new borrowers.
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