Newsletter 12 - May 2014

Welcome to our newsletter, it’s a time of great national media hype on rising house prices and a housing bubble but how does that relate locally?

UK house prices rose by 8% in the year to the end of March, official figures show, however the latest official data from the Office for National Statistics (ONS) showed that the annual property price increase in London stood at 17%, excluding London and the South East of England, prices were up by 4.7%.

In the northwest as a region, according to Rightmove, the prices rose by 1% annually which means that house prices locally remain closely linked to the inflation rate as opposed to any bubble effect.

An example of this wide range of activity is demonstrated by prices in Northern Ireland increasing by 0.3% on a year-on-year basis and by 0.8% in Scotland.

House price data from the Halifax and Nationwide, based on their lending, have also shown fairly sharp rises in prices on average over the last year, despite the regional differences. Locally this can be attributed to a change in the market with people up-sizing, many for the first time since 2007.

This has prompted some commentators to call for the second phase of the government-backed Help to Buy Scheme in the UK - which supports new homebuyers who might have struggled to get a mortgage - to be scaled back.

There is much debate about the effect of the Help to Buy Scheme and would withdrawing it cool the market. Within our region the take up has been so small that it’s effect would only be felt if it changed the current positive public perception on the market.

Mortgage rules have been altered recently and that is thought to be lengthening the time it takes to get a home loan. This has reduced the number of mortgage approvals in recent weeks, which may have more effect on cooling the market that the potential changes in Help to Buy.

Certainly as the market emerges from a lengthy recession buying now is a good time.

I hope you enjoy the rest of our Newsletter and if you have any comments to make, please do send us an email and we'll ensure we get back to you.

Rob Farnham
Chief Executive, The Venmore Group