UK house price stats distorted by London boom

By Christine Farrell

The average house price in the UK has risen to a record level according to the Office for National Statistics (ONS), but like with all statistics, a little scratching at the surface reveals a slightly different picture.

Figures that deal with the UK property market as a whole are distorted as a result of house prices in London increasing by 8.7 per cent in the first 8 months of 2013. Those gains more than cover up the 0.7 per cent price decreases in Scotland, and the modest 1 per cent and 1.1 per cent property value increases in Wales and Northern Ireland respectively.

As a result the statistics suggest that house prices in the UK have gone up on average by 3.8 per cent between January and August 2013, but excluding London and the South East of England brings that total down to 2.1 per cent. Removing England from the UK property market altogether results in an average 0.5 per cent increase in property prices.

Furthermore, the percentage increases in prices don't in themselves give an accurate picture of the regional property markets throughout the UK. It is important to understand the history of property price declines to put the recent increases into context.

The property boom that peaked in 2007 in Northern Ireland meant that house values had a much higher level to fall from following the recession compared to most other parts of the UK. The price decreases were severe leaving many home owners struggling with negative equity. At the end of June this year Northern Ireland property values were still down 53 per cent compared to the pre-recession levels. By contrast properties in England were down by 5 per cent, in Scotland by 12 per cent, and in Wales by 13 per cent. As such Scottish home owners are still largely better off than Northern Ireland home owners even though they have yet to see an increase in property values this year.

First time buyers do however stand to gain as a result of the recent property price increases, and the government Help to Buy scheme is also helping to lower the hurdle of the deposit that was preventing so many from getting on the property ladder.

If you are buying, selling or remortgaging a house in Northern Ireland, and need a property solicitor to handle the conveyancing process for you, contact Wilson Nesbitt in Belfast by calling 0800 840 9290.

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