The Land Registry’s monthly house price index was released on 28 June, and contained non-seasonally adjusted* data on house price movements in May. A positive monthly change of 0.1% and annual change of 0.5% bring the average UK house price to £161,969.
Though these figures show only a modest growth, other recent statistics show an increase in mortgage approvals in May that surpassed economists’ expectations to reach a three-and-a-half-year high. This will have resulted in increased demand for housing that will likely have had a greater effect on prices in June – indeed, Nationwide’s figures for last month show an annual growth of 1.9%, which is the fastest seen since September 2010.
As always, the capital has a pronounced effect on the figures. With the London average of £375,068 excluded from the figures, the average price for England and Wales drops by 14.5% to £138,562. This demonstrates the remarkable pull that London has on the national figures, which often masks the market performance in other regions.
Despite the upward trend of house prices, rents seem to be remaining level or falling in many parts of the country, at least on a monthly basis. The average UK rent is now £787 – a 0.7% decrease since April, though a 2.5% increase since May 2013. The annual increase could, again, be partly attributed to the effect of Greater London, where rents increased by 3.1% in the last year. This is despite two consecutive annual drops in the number of employed tenants moving into rented accommodation in Greater London.
The short-term drop in rental prices is likely attributable to the growing availability of residential mortgage finance, which is allowing many first time buyers to leave the private rented sector and get onto the housing ladder.
June house price index
The next Land Registry index will be released on 26 July. Read the current report in full.
The Land Registry’s data is revised each month with the addition of new figures. See www.landregistry.gov.uk for more information.