Latest data from the ONS indicates London house price growth is the highest for March for the first time this year.
Data from the Office of National Statistics (ONS) reveal London house price growth of 13.0% over the year to March 2016, the first time in double figures this year.
The capital leads the South East rising 12.2% and the East of England up 12.1% for the first time this year with average UK house price growth over the year at 9.0%.
Excluding London and the South East average UK prices were higher by 5.9% and there were large differences across the country.
For home movers leaving areas with the highest rising property values to areas with lower growth, they may have extra equity for a deposit to buy a larger home or can reduce their mortgage.
The strengthening in the London market makes it harder for first time buyers to take their first step to owning a property as they would need to have a higher income or a larger deposit.
Slower growth in the north of the country
Regions in the north of the country have experienced lower growth in house prices with the lowest being North East on 0.0% year-on-year.
Other regions such as the North West was higher by 4.6% while Wales increased by only 2.1% and in Scotland prices dropped 6.1% over the year.
According to the ONS the increases in some regions was in response to the new stamp duty rates for buy-to-let properties and second homes from April 2016.
Average property values and annual changes for March 2016 from the ONS are shown below.
| Area | Annual Changes | Property Values |
|---|---|---|
| London | 13.0% | £552,000 |
| South East | 12.2% | £375,000 |
| East | 12.1% | £324,000 |
| England | 10.1% | £307,000 |
| UK | 9.0% | £292,000 |
| South West | 8.9% | £270,000 |
| West Midlands | 4.3% | £209,000 |
| East Midlands | 12.1% | £200,000 |
| Scoltand | 6.1% | £193,000 |
| Yorks and the Humber | 5.5% | £186,000 |
| North West | 4.6% | £185,000 |
| Wales | 2.1% | £176,000 |
| North East | 0.0% | £158,000 |
| Northern Ireland | 6.4% | £155,000 |
London remains significantly ahead of other regions in terms of property values with the average price of £552,000 with the South East next on £275,000. The lowest average house price was Northern Ireland with £155,000.
Older homeowners with considerable value in their property offers the equity release mortgage buyer access to wealth using a lifetime mortgage to repay an interest only mortgage, holidays or home improvements.
For remortgage buyers higher prices give them an opportunity to release capital which they can use to improve their home.
Across the UK the average house price was £292,000 and excluding London and the South East of England the average reduces to £221,000.
First time buyer prices rising fast
Over the past year the growth in property prices for first time buyers to March was 9.7% compared to an increase of 7.7% in February. On average the value paid for a new home was £220,000 a rise of £6,000 over the month.
For existing homeowners prices are up by 8.7% over the year and the average value paid by owner occupiers was £345,000, a rise of £9,000 over the month.
New-build house prices are up by 8.1% year-on-year down from 9.1% with averages value of £295,000 or a rise of £14,000 during the month.
For pre-owned homes prices are up strongly at 9.1% over the year which is higher than the previous month of 7.5% and the average price paid was £292,000 or £8,000 more over the month.
For home movers trading up, you may find the gap to next home is widening requiring you to have a higher income or greater deposit.
What are your next steps?
Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Learn more by using the mortgage monthly cost calculators, equity release calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise.
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