D_Property

Average house prices in the UK increased by 6.2% in the 12 months to January 2017, up from 5.7% in the year to December 2016, according to the latest official figures to be published.

The average UK house price was £218,000 in January, some £13,000 higher than in January 2016 and £1,000 higher than December 2016, the data published by the Office of National Statistics also shows.

Overall the figures show that the strong growth in the housing market, which began at the end of 2013, is continuing. But the average annual price growth is still below the average of 7.4% seen in 2016.

The main contribution to the increase in UK house prices came from England where house prices increased by 6.5% year on year to an average of £235,000. Wales saw house prices increase by 4.2% year on year to £146,000. In Scotland, the average price increased by 4% over the year to £142,000 while the average price in Northern Ireland increased by 5.7% year on year to £125,000.

On a regional basis, London continues to have the highest average house price at £491,000, followed by the South East and the East of England at £319,000 and £279,000 respectively. The lowest average price continues to be in the North East at £124,000.

The East of England is the region which showed the highest annual growth with prices increasing by 9.4%, followed by the South East at 8.7%, and London at 7.3%. The lowest annual growth was in the North East where prices increased by 2.2% over the year.

The local authority showing the largest annual growth in the year to January 2017 was the Shetland Islands where prices increased by 21.9% to stand at £182,000. However, the ONS index report points out that a low numbers of sales areas such as the Shetland Islands and Na h-Eileanan Siar can lead to volatility in the series.

The lowest annual growth was recorded in the city of Aberdeen where prices fell by 10.2% to stand at £163,000.

In January 2017 the most expensive borough to live in was Kensington and Chelsea where the cost of an average house was £1.3 million. In contrast, the cheapest area to purchase a property was Burnley where an average house cost £73,000.

Russell Quirk, chief executive officer of eMoov, pointed out that although mortgage based indices like those from the Halifax and the Nationwide offer an indication on how the market is behaving, this first set of 2017 data from the Government provides a concrete view of how the market has emerged from 2016.

‘Despite the seasonal lull towards the end of the year, prices have continued their upward trend and the market looks strong heading into 2017,’ he said but added that he believes that this continued growth does hinge on next Wednesday’s triggering of Article 50 to begin the formal process of the UK leaving the European Union.

But he also believes that there is also a chance it will further stabilise the market as the current period of Brexit limbo experienced since last June will finally come to a close.

‘In many cases, the uncertainty of an outcome can be far more detrimental than the outcome itself and it is clear that many buyers and sellers have been holding tight on a sale until a decision is made. Despite this, it is actually the markets like the South East and London in particular where the most detrimental impacts of Brexit have been forecast that have continued to see the strongest price growth,’ Quirk explained.

Doug Crawford, chief executive officer of My Home Move, believes that in the long term, demand for both rented and owner occupied accommodation will support prices and sales volumes. ‘While it is always good to see healthy transaction levels, people are rightly concerned about first time buyers’ prospects. With prices continuing to rise faster than wages, there is a risk that those without access to gifted deposits will find themselves excluded from the market,’ he said.
But it is not all good news as higher pries make it harder for first time buyers to get on the housing ladder and Jeremy Duncombe, director of the Legal & General Mortgage Club, pointed out that average house prices in England and Wales have now reached 7.6 times more than average earnings.

‘This gap is only going to widen if prices continue to follow this trend, preventing many from taking their first steps onto the property ladder. The root of this ongoing problem lies with supply not being able to keep up with demand. To put it simply, we are not building enough homes,’ he said.

‘Although the Government’s recent Housing White Paper promised change, we need to start seeing these promises being delivered against. It is vital we start addressing these problems head on and find a workable solution to this major issue,’ he added.

But Stephen Wasserman, managing director of West One Loans, is optimistic about the outlook for the housing market. ‘With Article 50 set to be triggered on 29 March, it’s likely there will be a prolonged period of economic uncertainty that follows, but we are optimistic for the future of the property market. The specialist lending sector, particularly bridging finance, is seeing increased volumes of lending. Investors are attracted to the flexibility of tailored financing in today’s climate but what’s imperative now is that the industry responds by making more diverse financing options available to property purchasers,’ he said.

Source: www.propertywire.com

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