House prices in the UK are up over the year and remain stable as the number of sales completed have dropped by up to a third.
Data from the Office of National Statistics (ONS) shows house prices are 8.4% higher year-on-year with the UK average price at £218,964 rising 1.3% for the month.
The sale of homes has decreased in England by 32.2% from 85,020 last year to only 57,637 property sales by June 2016.
This is followed by Wales where property sales lower by 27%, Northern Ireland down 21% and Scotland down 7%. The Royal Institute of Chartered Surveyors (Rics) also reported falling new buyer enquiries over the past three months.
House prices steady in London
House prices in London were a similar story to the rest of the country with a rise over the year of 12.1% and the average house price at £488,908 rising 1.3% for the month.
There was local differences outer London areas where house prices are lower with strong growth over the year compared to central London.
Average prices and annual change for August 2016 from the ONS are shown below.
| London borough | House prices |
Annual changes |
|---|---|---|
| Newham | £372,897 | 23.7% |
| Havering | £450,429 | 19.0% |
| Waltham Forest | £435,572 | 18.9% |
| Croydon | £369,411 | 18.0% |
| Redbridge | £414,992 | 18.0% |
| Bexley | £328,493 | 17.2% |
| Barking and Dagenham | £283,119 | 17.1% |
| Lewisham | £420,014 | 16.7% |
| Hillingdon | £416,077 | 16.5% |
| Sutton | £381,288 | 16.5% |
Newham remains the highest growth borough with house prices rising 23.7% over the year adding £71,393 for the average home with a value of £372,897.
The rise in house prices in these boroughs means first time buyers would require a larger deposit or higher earnings to purchase their first home.
For remortgage buyers the advantage of higher prices is the opportunity to release capital which they can use to improve their home.
Higher prices can make it more difficult for home movers as the gap between their current home and the next increases which means they need a larger mortgage.
Not all boroughs are rising at this rate with central London locations such as Camden lower by -2.7%, Kensington And Chelsea up only 1.5%, Hammersmith and Fulham higher by 1.9% and City of Westminster up 3.1%.
Slowdown in house price inflation
According to the ONS supply and demand was broadly unchanged for the month and indicators are weaker than in 2015 and early 2016.
The number of lending approvals for house purchases fell during August compared to July and house sales were stable although below 2014 levels.
Property values and annual change for August 2016 from the ONS are shown below.
| Area | Annual changes | Property values |
|---|---|---|
| London | 12.1% | £488,908 |
| South East | 12.2% | £317,904 |
| East of England | 13.3% | £276,952 |
| South West | 9.0% | £243,226 |
| England | 9.2% | £235,573 |
| West Midlands | 6.9% | £179,429 |
| East Midlands | 7.6% | £175,610 |
| Yorks and the Humber | 4.9% | £152,394 |
| North West | 6.3% | £151,489 |
| Scoltand | 4.3% | £144,561 |
| Wales | 2.7% | £144,514 |
| North East | 3.0% | £127,385 |
| Northern Ireland | 7.8% | £123,241 |
The East of England is ahead with house prices 13.2% higher over the year followed by London up 12.3% and the South East up by 11.9%.
There is a difference in the average amount paid for a property in cash which is £207,982 compared to those with a mortgage with a price of £228,808.
For older homeowners the considerable value in their property allows the equity release mortgage buyer to access wealth for home improvements, gift to a family member or buy a more expensive home.
The Royal Institute of Chartered Surveyors (Rics) has reported falling new buyer enquiries over the past three months, with demand from buy-to-let investors falling more sharply than demand from first time buyers and existing owners.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage monthly cost calculators, property value tracker chart and equity release calculator.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything or even benefit a family member or pay for care at home.
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