House price inflation accelerates in UK
Topics: HOUSE INFLATION UK
Rising from the third quarter’s six-and-a-half-year low of 1.5%, the latest increase was the strongest recorded since the first quarter of 2019.
Prices were also up 1.0% on a seasonally adjusted basis since the previous quarter, to indicate some momentum in market activity following an increase of 0.4% in the third quarter.
Despite the positive end to the year, looking at 2019 overall, the UK housing market nonetheless endured its weakest performance since 2012.
Prices rose a modest 2.0%, down from the 3.0% rise recorded in 2018 and an average increase of 3.7% during the last decade.
2019 also saw a divergence of inflation by buyer type.
Whereas house-movers recorded an increase in prices of just 1.8% in 2019, the lowest rise for seven years, first-time buyers registered a slight uptick of inflation to 2.5% (from 2.4% in 2018).
By property type, new house price inflation was 1.9%, compared to 3.0% in 2018.
Price rises for existing properties was slightly higher than new houses, coming in at 2.1% for 2019.
Regional data for the final quarter of 2019 indicated that the UK is currently split into a two-speed property market.
On the one hand, prices remained under pressure across much of the south of England.
The South East and Greater London again recorded year-onyear price declines in the fourth quarter (-0.1%) although, amid evidence of a pick-up of activity in the final weeks of 2019, price falls were notably weaker than earlier in the year.
In notable contrast, Wales (6.5%) remains the strongest performing in terms of house price inflation, whilst across the north of England (North West, Yorkshire and Humberside and the North East), inflation rates were all above 4%.
Despite easing to a one-year low, price inflation in Scotland remained marked at 3.8%.
Meanwhile, in the Midlands, both the East (2.6%) and the West (2.2%) recorded price increases that were broadly in line with the national average.
Although 2019 proved to be a challenging year for the housing market in the south of England, prices here remain comfortably above the UK average.
In London, the typical house price is currently just under £478,000, some £156,000 higher than the next most expensive region, the South East.
Moreover, despite falling on a year-on-year basis throughout 2019, prices in London have risen 73% compared to opening quarter of 2010, whilst in the South East prices are 47% higher over the past decade.
Conversely, prices in the North East and Northern Ireland remained well below the UK average at the end of 2019, coming in at £137,066 and £144,832 respectively.
Both regions have experienced the lowest net increases in prices over the past decade, with the rise in Northern Ireland just 2% (and still some 40% below their pre-financial crisis peak). ■