Record High for UK Property Market
The most recent round of official data released this month has shown house prices for England and Wales reach record highs, surpassing even the peak of the property boom back in 2007.
At the start of July the Halifax reported via its House Price Index that they had seen average prices go beyond £200,000 for the first time; marking the fourth consecutive month that figures have risen.
In addition, figures later in the month from the Land Registry, which records the prices of sold houses, showed averages across England and Wales had risen by around 1% month on month. Whilst their average figures differ somewhat from the Halifax, citing a price of £181,619, the overall trend remains the same. Namely that prices have risen significantly across the country from this time a year ago.
If we look at the property landscape across London some interesting trends are thrown up. Across the capital prices have generally followed the national upward move, with certain areas enjoying significant increases year on year. Newham, for instance seeing house prices soar by more than 16% from 2014.
On the other side of the coin, however, is the fairly modest 0.7% increase shown on properties in Chelsea and Kensington.
So why the discrepancy?
In a sense, it could well point to the heightened demand for specific property types, sectors or even locations. Areas that have, traditionally, had properties lower down the valuation scale are seeing the biggest increases – a trend as true across London boroughs as it is the rest of England and Wales – whereas those areas with properties in the higher valuation bracket have pretty much held steady.
Accounting for this may lie in the notion that, while there are more potential first-time buyers, the amount of affordable properties coming onto the market has decreased, naturally driving demand.
Taking a look at property website Rightmove’s monthly report on the housing market, director Miles Shipside points to the fact that there is a supply issue in the traditional starter home sector, for which they receive upwards of 24% more enquiries than for larger properties, at the same time finding 10.6% fewer properties being made available than a year ago.
This drop off in available properties does fall into the first-time buyer sector that, industry consensus says, already has a shortfall in suitable properties.
Of course, the general economic climate is likely to take a role in the rising prices. With the recent growth combined to high employment and low interest rates, the landscape is conducive to increased demand for properties.
The overriding factor for this record increase appears to stem from the increased demand in the first-time buyer sector, highlighting again the need for greater investment into the creation of new affordable homes. And of course, there are implications in the buy-to-let market. With continued strain on the affordability of new homes, so the demand for quality rental properties remains a viable alternative. As a result, those properties in the sector that are on the market are a continually attractive proposition for buy-to-let investors, increasing demand and playing its part in the increase in prices we’re seeing in the market.