The latest survey from the Nationwide Building Society suggests that house process across the UK rose by 8.4% last year. This is the first survey to be published which looks at the changes in property prices changes for the whole of 2013; but they’re only based on figures collated by Nationwide itself and thus don’t necessarily give a complete picture.
A snapshot of the housing market
The figures for Scotland however show a relatively modest rise – 3.7%. The statistics for the country have, as is so often been the case, been skewed by London where average prices are now 14% higher than their previous peak in 2007. However, there was a 7% year-on-year rise in Northern Ireland and 6.1% in Wales. But across the board the average UK property price is still 5% below the peak in prices in late 2007.
The evidence from this survey also suggests that the increase in house prices was accelerating towards the end of the year – up by 1.4% in December compared with November. Any by the end of December, they were up by 2.9% for the quarter compared with the previous three months.
Robert Gardner
Nationwide’s chief economist
All of this convinces Robert Gardner, Nationwide’s chief economist, that “the UK housing market followed the trajectory of the wider economy through 2013, gaining momentum as the year progressed. Part of the reason for the acceleration in house price growth is that the supply side of the market has not kept pace with the upturn in demand, even though buyer numbers remain subdued by historic standards.”
In Scotland, a report from Registers of Scotland in October suggested that property prices were up just 1.5% compared to the same period in 2012. However, Robert Carroll of the Edinburgh-based estate agents Mov8 believes they are likely to rise more sharply as we move into 2014.
Robert Carroll of Mov8
“What’s been interesting in 2013,” he explains, “has been that a surge in demand has not been matched by a surge in supply: in other words, for all the buyers out there, and the increase in sales, there hasn’t been as large a rise in the number of sellers putting their properties on the market.
“The statistics we have for Edinburgh, the Lothians, and parts of Fife for 2013 (to end of November) are that sales are up about 23% but ‘listings’ (new properties coming to the market) are only up about 9%. At this time of year, in particular, that gap is larger and the effect of short supply is even more acute: properties that have been sitting around for some time, gathering not too much attention, are getting far more interest.”
He’s concerned that prices could rise faster than they did in 2013, something he’s not entirely happy about because, when demand outstrips supply as it currently does, you tend to see prices going up. Last year, that rise was quite modest; however, he believes that demand, fuelled by Help to Buy and increased buyer confidence, will continue to outstrip supply.
“Why don’t I want to see this?” he asks. “First, we represent buyers as well as sellers and it’s heart breaking representing people who are losing-out at multiple closing dates. Second, we are most interested in a balanced property market rather than run-away inflation: we operated in an overheated property market a few years ago and of course it all ended in tears for a lot of people.”