Slower rise in house prices In December, the Office for National Statistics (ONS), reported that October saw national house price inflation slowing to 10.4%, from its previous level of 12.1% recorded in September, with the average house price across the whole of the UK now sitting at £271,000. As always, there were wide regional variations with the lowest region, the North East, seeing average house prices of £97,356, which represents an annual increase of only 3.9%, whilst at the other extreme, London recorded average house prices of £460,060 for an annual rise of 17.2%. Detailing their findings, the ONS stated that England saw house price rises of 10.8%, with Wales reporting growth of 5.7%, Scotland 4.9%, and Northern Ireland also reporting 4.9% growth. Other recently released property surveys, conducted by large mortgage lenders such as Nationwide and Halifax, reflect similar findings. However, the Council of Mortgage Lenders, who represent the biggest lenders in the market, also reported that mortgage availability from their members had increased in October to £19bn, up from the previous month’s level of £17.8bn. They went on to add that currently there are 11.1 million mortgages held across the UK, worth a total of £1.2 trillion. First-time buyers saw prices rising annually by 12% on average in October, but existing house owners only saw price increases of 9.7% on average over the same period. With average weekly wage growth now being 1.4% and CPI inflation at 0.5%, potential new home owners may be seeing light at the end of the tunnel, but with average house prices now representing more than ten times the average wage it is still a high fence to conquer for many. It will be interesting to see how the new stamp duty structure and rates will affect the market in the short-term. Markets (December) (Data supplied by the Outsourced Marketing Department) Geo-political and economic turrmoil upset the equity markets in December with the continuing eurozone crisis – effected especially by the failure of Greece to elect a President – the collapse in oil prices, and the massive devaluation of the Russian Rouble all taking their toll. Given the above, the FTSE100 fluctuated wildly, having lost over 8% at one time in December, only to recover to 6,566.09 at the close of the year for a fall of 2.33%. This volatility through 2014 helped create 110 million trades by mid-December; the highest number seen since the 2008 economic crisis, with a total value of £825.3 billion. The FTSE 250 fared better, gaining 1.47% to 16,085.44, while the junior AIM market fell by 3.26% to 702.0. The European markets suffered as well, as the Eurostoxx50 lost 3.2%, to close out the year at 3,146.43. Elsewhere, however, the American Dow Jones Index saw a record year, surpassing the intraday 18,000 mark for the first time in December, but finishing the month flat on 17,823.07, up 7.52% for 2014. The heavily technology-based Nasdaq index slipped by 1.16% to 4,736.05. The currency markets were dominated by the across-the-board strengthening of the US Dollar. It rose to $1.56 against Sterling and to $1.21 against the Euro. UK Sterling held its own against the Euro, showing a gain of 2.5% to €1.29. The deeply troubled Russian Rouble fell to 80Rub to the US$ at one stage in December, compared to its zenith of 28Rub seen in the first quarter of the year. It stabilised by the close to 55Rub, as some of Russia’s $400 billion of foreign currency reserves were put to play to stem this fall. The price of oil continued in free-fall with the benchmark Brent Crude price retreating to $57.33 a barrel. Oil fell by 48.5% during 2014. Given the economic shock waves seen in December, gold, the usual safe haven in times of unrest, had a relatively quite month, closing 2014 at $1,199.00 a troy ounce, to show a gain of 2.89% for the month (but a loss of 1.74% for the year). Download full report here

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