The latest report released by the ONS highlights how despite the growing economic and political ambiguity, house prices continue to grow.
The average property price in the UK rose by 4.7% from last year to £220,713. The growth may not be anything to get excited about, but the slow and steady rise is certainly encouraging and demonstrates how the UK is contining to grow at a steady rate.
The fastest growth was seen in the East of England, with growth as much as 7.5%, and major cities, such as Manchester and Birmingham also performing well. Birmingham is now the fastest growing major city for house prices, with a 7.8% annual increase, raising the average property price to £154,900. Hometrack experts predict that growth in these cities will continue through 2017- record low mortgage rates, falling unemployment and lack of housing supply will continue to support the level of growth.
However figures show that London was the hardest hit, with the slowest growth rates in the UK at 3%, compare to 14% last year -though the average price of property continues to be more than double than anywhere in the UK at £481,345. This dramatic drop in growth is expected to continue for the next couple of years – prices will remain flat this year before rising by 2.5% next year and 4% in 2019.
This price growth halt could be due to a number of reasons. The doom and gloom of Brexit could have hindered interested from the overseas investors that are so drawn to the capital. But it may simply be the case that the London Property boom is over. Buyers have simply become priced out of the city and are looking at other locations for more affordable housing and investment opportunity.
Buyer intent is still high, but the fragility of the current property market still needs to be observed closely over the next year. As Brexit negotiations continue, the progress and outcomes may have the biggest implications on the property market.Back to Guru articles