House prices in the UK increased by 1.1% in April, ending the month 1.4% up on the same period in 2011, figures from the Office for National Statistics showed.
However, while prices in London rose by 4.9% over the year, there was an 8.1% decline in Northern Ireland, and Wales and Scotland experienced falls of 1.1% and 0.3% respectively.
The average UK house price reached £229,000, but there are wide regional variations, ranging from a £129,000 average in Northern Ireland to £388,000 in London. Properties in the south-east and east of England remained above the national average, and in the south-west there were increases of 1.6%, whereas there was a 1.3% fall in the north west, Yorkshire and Humber.
New homes realised the biggest leaps in price – up 5.1% from the previous 12 months, while resales rose by only 1.1%.
The end of the stamp duty holiday on properties worth up to £250,000 on 24 March has already begun to bite: the proportion of first-time buyers has fallen from 43% in March to 32% in April.
Although the rise in average prices across the country was more than experts had predicted, the outlook remains gloomy. Fragile consumer confidence and economic uncertainty are likely to pull prices down by around 3% by the end of 2012, according to Howard Archer, chief UK economist at IHS Global Insight.
“Housing market activity is persistently low according to long-term norms and, while it may eventually be lifted by more mortgages being granted at decent interest rates under the funding for lending scheme announced by the Bank of England and the Treasury, this is unlikely to be a major factor in the near term at least,” he said.
A shortfall in the number of properties on the market might drive prices back up, said Archer but, although the increase in homes for sale slowed from 4.8% in April to 2.2% in May, the number of new properties coming on to the market is still up by 10.6% over three months and outstrips the growth in buyer enquiries, according to research by Hometrack.
“These figures from the ONS confirm what we already know, that the housing market has been rather subdued over the past 12 months,” said Ashley Alexander, of the estate agent review website MeetMyAgent.co.uk.
“Property prices have stabilised due to low transaction volumes, a short supply of stock and weak demand although, not surprisingly, London has significantly outperformed all other areas of the country. However, if the London property market takes its foot off the pedal even for a second, the national picture will look far less rosy.”
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