House prices for new-build properties have risen by 17.9% for the year, double the rate of existing with highest growth in the South East.
The Office of National Statistics (ONS) report shows the average price for new-build homes is £293,461 up 17.9% for the year compared to the average for England of £222,455 only increasing by 8.3% to May 2016.
In the South east new-build house prices increased by 23.0% followed by the East of England with 22.8% and London up 20.6% over the year.
London property values remained the highest with the average price for a new-build of £506,273 compared to £469,356 for an existing home.
For England the average cost of a new-build is £293,461, a rise of 9.6% over the month to May and significantly higher than existing property value of £222,455.
House prices remain strong
The annual increase in house prices to may this year remained strong with the highest increase in London up 13.6% on average.
For remortgage buyers the rise in prices give them an opportunity to release capital which they can use to improve their home.
In contrast the rapid rise in house prices means first time buyers and home movers would require a larger deposit or higher earnings to buy.
Average property values and annual change for May 2016 from the ONS are shown below.
| Area | Annual Changes | Property Values |
|---|---|---|
| London | 13.6% | £472,163 |
| South East | 12.9% | £306,037 |
| East of England | 12.8% | £265,156 |
| South West | 7.4% | £231,469 |
| England | 8.9% | £226,807 |
| West Midlands | 6.7% | £173,566 |
| East Midlands | 7.9% | £170,120 |
| Yorks and the Humber | 3.8% | £147,044 |
| North West | 4.3% | £145,730 |
| Wales | 3.6% | £142,568 |
| Scoltand | 4.0% | £141,142 |
| North East | 3.2% | £124,466 |
| Northern Ireland | 5.9% | £117,524 |
The highest monthly change was for Scotland increasing by 2.8% with an average house price of £141,142 followed by North East of England up by 2.1%.
Decreases in property values were for Northern Ireland lower by 1.0% for the month followed by North West of England down 0.3% and Yorkshire and The Humber down 0.2%.
For older homeowners greater value in their property allows the equity release mortgage buyer to access wealth to reduce inheritance tax owed by your beneficiaries or pay for care at home.
Top ten London boroughs
The leading boroughs in London all increased by over 18% over the year to May 2016 with Waltham Forest the highest with 22.1% and house price of £418,146.
The average house prices and annual change for May 2016 from the ONS are shown below.
| Borough | House Prices |
Annual Changes |
|---|---|---|
| Waltham Forest | £418,146 | 22.1% |
| Barking and Dagenham | £268,579 | 21.1% |
| Newham | £351,893 | 20.7% |
| Bexley | £317,985 | 20.2% |
| Haringey | £554,998 | 20.2% |
| Croydon | £354,898 | 19.3% |
| Greenwich | £379,746 | 18.8% |
| Lewisham | £408,559 | 18.8% |
| Redbridge | £390,592 | 18.8% |
| Enfield | £384,179 | 18.3% |
All of the boroughs are in the up and coming areas and outside central London with cheaper property prices below the average for the capital as first time buyers look for more affordable homes.
The costs make it harder for buy-to-let landlords as they now pay an extra 3% in stamp duty on the whole property value and lenders would need a larger deposit or higher rental incomes to cover the interest payments.
The cheapest location in London is Barking and Dagenham with an average house price of £268,579 increasing by 21.1% over a year.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth for home or garden improvements and holidays.
Learn more by using the equity release calculator, property value tracker chart and mortgage costs calculator. Start with a free mortgage quote or call us and we can take your details.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
