Residential property prices in the UK increased by 6.7% in the 12 months to November 2016, according to the latest official data to be published.
Prices were also up 1.1% month on month, taking the average price of a property to £217,928, the figures from the Office of National Statistics (ONS) shows.
The main contribution to the increase in UK house prices came from England where prices increased by 7.2% over the year to an average of £234,000 and by 1% month on month. But in London prices increased by 8.1% to an average of £481,648 and were up 1.8% compared to October 2016.
Wales saw house prices increase by 4.1% to £147,000 but prices were down 0.3% month on month. In Scotland prices increased by 3.3% to £143,000. The average price in Northern Ireland currently stands at £124,000.
The East of England recorded the biggest annual increase in with price growth of 10.5% while the West Midlands saw the biggest monthly rise at 2.2%. The lowest annual price growth was 3.2% in the North East and the lowest monthly rise by 0.3% in the South East.
Sales during September 2016, the most up to date Land Registry figures available, show that:
the number of transactions in England fell by 22% year on year, in Wales they fell by 10.4% and in London they fell significantly by 39.5%.
According to Ian Thomas, co-founder of LendInvest, despite some knocks, the property market will remain fundamentally strong throughout 2017. He believes that a sustained drive by the Government to increase the supply of new homes and the forthcoming Housing White Paper will add detail to the commitments already made by the Housing Minister to tackle the housing crisis. ‘Industry will be watching with hopes that these announcements will reinvigorate the market,’ he said.
There is cautious optimism in the market, according to Jonathan Hopper, managing director of Garrington Property Finders, who pointed out that prices in November were growing at almost exactly the same rate as they were a year before.
‘After dusting itself off from the Brexit shock, the market recovered steadily at the tail end of 2016 as would-be buyers who had held off in the referendum’s immediate aftermath returned. That initial procrastination has now been replaced by cautious optimism in many parts of the UK, and on the front line activity has been brisk during the early weeks of 2017,’ he said.
He explained that there is a lot of competition for mid-priced properties as there is not enough stock to go around and with interest rates still at record lows, many buyers are looking beyond the Brexit headlines at their own finances, and deciding that now is the time to buy before rising property prices erode their purchasing power.
‘With today’s jump in consumer inflation likely to nudge the Bank of England into increasing interest rates in coming months, there’s a growing sense that the cheap mortgages won’t last, and this is spurring many buyers into action,’ he added.
Rising annual and monthly rates underline the reassuring resilience of the housing market, according to Rob Weaver, director of investments at property crowdfunding platform Property Partner, as the severe shortage in supply combined with record low borrowing rates is persistently pushing up prices.
‘At the beginning of 2013, the average UK house price stood at £167,617. In November, we saw that figure rise again to £218,000, an increase of more than £50,000. The doomsayers have been silenced,’ he said.
