House prices continued to grow at a steady pace in September, going up by 2% over the year, with the average house in the UK now costing £214,922, according to latest data from Nationwide.
Robert Gardner, Nationwide's chief economist, says that annual house price growth has been confined to a fairly narrow range of between 2% and 3% over the past 12 months, which suggests “little change in the balance between demand and supply in the market”.
But regional variations were quite marked. Yorkshire & Humberside was the best performing region, with prices up by 5.8%. But the North was the weakest performing region, with prices down overall by -1.7% over the year.
The East Midlands also continued to see relatively strong growth, with prices up 4.8% year-on-year.
For the fifth quarter in a row, London prices fell over the year. In September, prices dropped just a little at -0.7%.
But Mr Gardner points out that house prices in the capital still remain high.
“Prices (in London) are only around 3% lower than a record high in early 2017 and are still more than 50% more than in 2007,” he says.
Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chairman, comments: “These numbers are actually quite good news because they show a fairly steady market after house prices fell by their largest amount in six years in August.
“Once again, we are finding that the market continues to be supported by a shortage of stock and low mortgage rates, as well as new buyers returning from holiday keen to take advantage of some more realistic pricing.
‘It is a mixed bag, however, because activity and prices in London remain challenging whereas in many places outside it is quite a different picture. This is mainly due to historic affordability reasons, particularly when this well-respected index confirms London prices are still more than 50% above their 2007 peak.”
|Region||Average Price (Q3 2018)||Annual % change this quarter||Annual % change last quarter|
|Yorks & H'side||£160,263||5.8%||2.1%|
Source: Nationwide, 2 October 2018
For the sixth quarter in a row, price growth in Northern England exceeded that in the South. While the North saw price falls, other regions such as Yorkshire and Humberside and the North West saw price growth accelerate, so overall prices in Northern England were up 4.1% over the year.
In contrast, in Southern England London and the Outer Metropolitan regions saw prices decline over the year, meaning overall price growth in the South slowed to just 0.3%. Burt there is a still a significant price gap, with average prices in the South around twice those in the North.
James Newbery, investment manager at property investment platform British Pearl, says:“What’s striking is that we are still a nation divided. Growth since the financial crisis has been incredibly uneven with many regions still struggling to get back to where they began whereas London has powered ahead. That means there are still opportunities out there but they must be chosen carefully.
“Even in the market that has cooled the most - London - prices are still very close to all-time highs. It has been a gentle softening over what is now a relatively long period, and you can partly credit Help To Buy and a weaker pound with warding off a convulsion in prices.”