The rise in property values for the East of England are leading the market with new-build homes seeing a 32% price increase in the last year.
Data from the Office of National Statistics (ONS) shows house price growth in the East of England is 10.5% higher over a year to November 2016 with an average price of £278,349.
The highest price growth is new-build homes with values higher by 32.8% year-on-year and average price paid of £397,208, compared to a rise of 8.9% for existing homes and average price of £270,529.
New-build properties are popular with first time buyers although the rapidly rising prices would require a larger deposit or higher earnings to purchase their first home.
For home movers, the difference in house price growth of their existing home and a new-build property means they need to find additional capital to buy, either with a bigger deposit or a larger mortgage.
East of England remains strong
According to the ONS, annual house price growth in the East of England and the South East has now surpassed that of London for the 4th month in a row.
The East of England has seen a rise of 10.5% year-on-year and the only area remaining in double figures with the South East and South West rising 8.6% over the year.
Average prices and annual change for the UK to November 2016 from the ONS are shown below.
| Area | Annual changes | Property values |
|---|---|---|
| London | 8.1% | £481,648 |
| South East | 8.6% | £313,334 |
| East of England | 10.5% | £278,349 |
| South West | 8.6% | £239,371 |
| England | 7.2% | £234,278 |
| West Midlands | 7.4% | £181,372 |
| East Midlands | 7.3% | £176,524 |
| Yorks and the Humber | 5.1% | £152,418 |
| North West | 5.2% | £150,249 |
| Wales | 4.1% | £146,742 |
| Scoltand | 3.3% | £143,033 |
| North East | 3.2% | £126,989 |
| Northern Ireland | 5.4% | £124,093 |
London house prices remain the highest with the average price at £481,648 rising 1.8% in the last month reversing the fall experienced the previous month.
The West Midlands experienced the highest monthly rise up 2.2% and the worst performance was from Wales with house prices lower by -0.2% during the month.
For remortgage buyers these higher prices will give them an opportunity to release capital which they can use to improve their home such as an extension, new kitchen or bathroom which would increase their property value further.
Prices rise in London boroughs
Although across the capital average house prices are slowing, however, the up and coming boroughs in London have seen a strong rise.
Barking and Dagenham is leading the way up 17.0% year-on-year with average price now at £288,873 followed by Newham higher by 16.3% and average value of £369,236.
Average prices and annual change in London for October 2016 from the ONS for the top ten boroughs are shown below.
| London borough | House prices |
Annual changes |
|---|---|---|
| Barking and Dagenham | £288,873 | 17.0% |
| Newham | £369,236 | 16.3% |
| Bexley | £335,076 | 16.1% |
| Havering | £358,805 | 15.5% |
| Waltham Forest | £438,294 | 13.8% |
| Croydon | £367,076 | 12.4% |
| Enfield | £395,044 | 11.0% |
| Sutton | £372,926 | 10.1% |
| Tower Hamlets | £484,861 | 10.0% |
| Brent | £500,605 | 9.9% |
In fact, eight of the top ten fastest growing boroughs have average values below the London average of £481,648 with first time buyers, home movers and buy-to-let investors are seeking value for money.
Higher house prices in London allows the older equity release mortgage buyer to accessing the wealth in their property to repay an interest only mortgage, gift to a family member or even buy a more expensive home.
New-build properties in London have risen in price at the fastest rate up 27.4% in the last year and 10.5% in the month to November 2016 with a higher average price paid of £561,246.
The West Midlands has shown the highest rise over a month in new-build house prices up 12.4% and an average price is now £282,460.
According to the Bank of England, housing market activity recovered in the final quarter of 2016 following a period of weakness after the EU referendum and stamp duty changes but remains weak in central London.
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.
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.
Learn more by using the equity release calculator, property value tracker chart and mortgage monthly cost calculator. Start with a free mortgage quote or call us and we can take your details.
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