West house prices outstrip inflation
House prices rose 5.9% in the year to July
House prices in the South West rose at twice the rate of inflation last year, official new figures show.
UK property prices surged by 11% year-on-year in August to reach another new all-time high of £189,306 on average, the Nationwide reported.
The mortgage lender found that property values were pushed up by 0.8% month-on-month, marking the sixteenth monthly increase in a row in July.
In a separate report published yesterday by the Land Registry, which is regarded as the most accurate guide by industry professionals, the increase in England and Wales was calculated at 7.2%.
The Land Registry said the annual increase to July across the six-county region, including Bristol and the M4 corridor, stood at 5.9%, making the average property in the region worth £184,049.
Richard Copus, South West spokesman for the National Association of Estate Agents, said the rise was probably closer to 4% in Devon, Cornwall and Somerset.
“It is a blunt average because South West figures always include Bristol, which is a very different market,” he added.
“In Western Morning News country we are looking at closer to 4% though surveyors say it’s less than that – if you take out first-time buyers it is probably about 3%.
“Things are healthy, prices went up a bit from the Help to Buy programme and new homes have risen considerably, but you still have to be careful not to ask to much or the property will go stale.”
The Nationwide House Price Index found that price growth continues to outpace earnings by “a wide margin” with average wage growth running at less than 1% in recent months.
Robert Gardner, chief economist at the lender, said: “At a national level housing affordability does not appear stretched by historic standards, in part due to the low level of mortgage rates. The cost of servicing a typical mortgage remains close to the long run average as a share of take home pay.”
Typical UK house prices first surpassed their 2007 peak in cash terms in May this year and they have been hitting new records every month since, Nationwide said.
But the study also detected a “cooling” in the market, adding that the outlook remains “highly
But the study also detected a “cooling” in the market, adding that the outlook remains “highly uncertain” after the number of mortgages approved fell by almost 20% between January and May.
Mortgage approvals generally dipped after stricter lending rules, which force lenders to ask for more detail about a mortgage applicant’s spending habits, came into force at the end of April but approvals have since rebounded slightly.
Year-on-year house price growth has been in double digits since April, according to the building society’s study.
Nationwide said it is still unclear how much of the cooling in activity was due to the introduction of the new Mortgage Market Review (MMR) rules as opposed to an underlying loss of momentum in the market.
The Land Registry said the average house price in England and Wales was now £175,653 compared with the peak of £181,442 in November 2007.
The region rose 1.5% from June to July, its market data showed.
Devon prices went up 4.3% while in Cornwall the yearly rise was just 1.5%.