Average price of property in London increased by 26% for the year

The residential property prices in the UK increased by 1% in June 2014 and are now 11.8% higher than in June 2013. This means that they have reached their peak since the beginning of 2007. The index of the Nationwide Building Society ( Nationwide Index ) published its most recent report of the UK property market.

All UK regions recorded a steady growth of the market, but London and the South-Eastern part of England far ahead of other regions in economic growth.

The average price of residential property in the UK has reached £188903. In London’s residential property increased in price by almost 26% in the second quarter of 2014 compared to the same period in 2013 and the average price per unit of residential property in London is £400,000 pounds. The lowest price increase for the year recorded in Scotland only 5.4% , reaching the average price of housing unit – £141872 . But Northern Ireland remains the cheapest region with an average cost of £117400 lbs.

The rate of growth in property prices in London begin to slow down and we can already say that it is not necessary to wait for 3 and 4 quarter of 2014, the same growth in property prices in London as it was the end of 2013.

On the level of prices will affect decision of the Bank of England to control mortgage deals by entering the loan limitations , and introduced the stress tests, which aimed to identify whether a borrower can withstand a 3% increase in rates.

Most of the banks already uses successfully applied the stress tests when considering requests for loans. Consequently, the proportion of borrowers whose loan amount is equal to or greater than 4.5 annual income has dropped significantly. Now, such borrowers not more than 15%.

The second reason for the slow growth of prices of steel market expectations of a rate hike by the Bank of England. In conditions of uncertainty, market expectations can be even worse than that figure, which will be the Bank of England. Despite the fact that the Bank of England is expected to impose an increased rate at the end of the year, the market slowdown may continue for several months.

However, all these financial and technical instruments of influence on the market, of course, are not his main problem. The main problem is insufficient quantity of new housing. Really to inspire the market, only a regular supply of new homes.

The growth in property prices in London 26% , of course, does not pull on the bubble, as these prices are dictated by the market and customers. However, experts now recommend investors to look to the regions of the UK, located outside London, as well as student housing. If the boom in the London property market has been observed for many years, the real estate market in the UK there has been only the first steps of recovery after a long crisis, and the main price rise is yet to come.

® Helen Antre on 03.07.2014

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