UK house prices rising almost 10 times faster than the eurozone but booming market will slowdown over next five years
07-11-2015
- UK property prices rose by 8.5% in the year to March 2015, says Eurostat
- But across the 19 countries using the euro, values were up just 0.9%
- Only Hungary, Sweden and Ireland recorded bigger increases than the UK
- Official Budget forecasts say the UK market will slow to 4.1% next year
By Matt Chorley, Political Editor for MailOnline
House prices in the UK are rising almost 10 times faster than countries in the eurozone, a new study reveals.
As Greece battles to secure a deal on its debts to stay in the single currency, official figures show how the British property market is outstripping most of the continent.
In the year to March prices in the UK were up 8.5 per cent, but across countries using the euro property values rose by just 0.9 per cent.
In the year to March prices in the UK were up 8.5 per cent, but across countries using the euro property values rose by just 0.9 per cent and only 2.5 per cent in the EU as a whole, according to Eurostat
In the first three months of 2015 prices in the UK were 8.5 per cent higher than a year earlier.
The figure marked a drop on the double-digit annual rises seen throughout most of last year.
But it puts Britain well ahead of most of Europe, with only Hungary (9.7 per cent), Sweden (11.6 per cent) and Ireland (16.8 per cent) recording bigger annual increases.
Six countries saw prices fall in the last year, all of them members of the 19-nation bloc which uses the single currency.
Latvia saw the biggest fall, down 5.8 per cent, followed by Italy (3.3 per cent) and France (1.6 per cent). Finland, Austria and Slovenia also saw small falls.
In the first three months of 2015, Belgium, Cyprus and Croatia all saw prices drop by 2.8 per cent.
Britain is well ahead of most of Europe, with only Hungary (9.7 per cent), Sweden (11.6 per cent) and Ireland (16.8 per cent) recording bigger annual increases
Experts believe the UK property market is starting to cool, after rising sharply throughout 2014.
The Office for Budget Responsibility said prices rose by 10 per cent in 2014, but expects an increase of only 5.7 per cent this year, and dropping to 4.1 per cent in 2016 before rising again in the rest of the decade.
The economic watchdog said it had ‘revised down our expectations for house price growth’ after new rules made it more difficult for people to get a mortgage.
‘Housing market indicators suggest price growth will continue to slow in coming quarters, but at a slightly faster rate than we previously expected,’ the OBR added.
Ministers today announced major changes to the planning system designed to speed up housebuilding and make it easier for people to get on the property ladder.
Business Secretary Sajid Javid said: ‘Undersupply of housing pushes up house prices in many areas and means millions of people can’t live and work where they want to, or even own their own home.
'We are absolutely determined to see more planning permissions granted and more houses built.’
The Office for Budget Responsibility said UK prices rose by 10 per cent in 2014, but expects an increase of only 5.7 per cent this year, and dropping to 4.1 per cent in 2016 before rising again in the rest of the decade
New laws will allow ministers to take over planning authorities in leafy areas that refuse to meet targets for house building.
Homeowners will also be able to add up to two extra storeys to their properties without needing planning permission if their neighbour has one already.
Treasury sources last night stressed that existing legal protections for the Green Belt will be retained.
But ministers are braced for a fresh clash with the National Trust and other countryside groups, and are determined to face down so-called Nimbys, intransigent residents who oppose all development near their homes.
The Chancellor will also introduce ‘automatic planning permission’ for projects on so-called brownfield land – sites that have been developed before.
In addition, the Government will create a national register of brownfield land and have new powers to seize plots for housing development if they have been unused for a long time.
Large housing schemes will bypass the local planning system altogether, with approval given by ministers.