UK house prices grew by 7.2% during 2014, according to Nationwide’s final monthly House Price Index, taking the average UK home to £188,559.
Overall yearly growth was tempered by a poor fourth-quarter in the housing market, with the last four months’ all showing a slowing of house price growth.
“The pace of annual house price growth continued to soften as 2014 drew to a close, slowing from 8.5% in November to 7.2% in December” said Robert Gardner, Nationwide’s chief economist.
“This marks the fourth consecutive month in which annual growth has moderated, despite house prices increasing by 0.2% month on month in December when taking seasonal adjustment into account. The 7.2% increase recorded over the year as a whole, is modestly lower than the 8.4% gain recorded in 2013.”
Estate agents have reported throughout 2014 that the London market has cooled, with sellers forced to review optimistic asking prices. This is, however, not the main cause of easing house price inflation, explains Robert Gardner.
“While cooling in the London market is a part of the story, this is not the main explanation for the slowdown evident in the UK figures in recent months. Indeed, annual price growth in the capital continued to outpace every other region in the UK, at 17.8% for Quarter 4. Overall, 12 of the 13 UK regions saw the pace of annual price growth slow.”
With other statistics showing individual area-specific increases, the appeal of being within touching distance of the city clearly remains a pull, as Andy McBride explains.
“Nationwide’s House Price Index goes into detail of specific values throughout the UK, and it’s particularly telling that the areas with the biggest annual increase are all within the popular commuting areas of London” said McBride, Business Development Director at Contractor Mortgages Made Easy.
“St. Albans in Hertfordshire has shown an incredible 24% increase throughout 2014, taking the average house value to £494,777 – nearly £50,000 more than the capital. With a commute in to St Pancras taking only 20 minutes, clearly the lure of being in the countryside but within touching distance of the City is strong.”
Further evidence of this comes with the other front runners in Nationwide’s research, with commuter-favourite Reading also seeing a sizeable 19% increase throughout 2014.
“Many parts of the capital, notably those redeveloped as part of the Olympic Legacy have suffered, with Hackney, Tower Hamlets and Newham all seeing demand fall by more than a third” said McBride. “This would suggest a positive start to 2015 for the outlying areas around the M25, as more people look to get value for money on property investment.”
“The beginning of the year is traditionally a busier quarter for the housing market. Throw in the new Stamp Duty structure as well and the signs are looking positive for the Home Counties, some of the most expensive property regions in the UK.”
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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