Property values in the UK continue to rise 4.7% in the year despite economic uncertainty while London growth rate reduces noticeably.
Research from the Office of National Statistics (ONS) shows house prices in the UK are rising at 4.7% in the year to May 2017 up 0.5% for the month and average property values are £220,713.
In contrast London struggles to make gains with a rise of 3.0% year-on-year down from last month of 4.7% and values decreased for the month by -0.30%.
There were stronger regional gains with the East of England showing the highest annual growth with prices increasing by 7.5% in the year followed by the East Midlands at 7.2%.
One advantage of rising house prices for homeowners in these regions is remortgage buyers can now release capital to make home improvements when your introductory mortgage offer ends.
Large differences in price gains
Following uncertainty of the Brexit vote the capitals luxury property market suffered from declining house prices such as the boroughs City of Westminster and Kensington And Chelsea.
In Kensington and Chelsea the average price was £1.33 million at the beginning of the year and reduced to £1.28 million just before the vote and prices have recovered to £1.50 million up 17.1% on the year to May 2017.
Average prices and annual change in London for May 2017 from the ONS for the top ten boroughs are shown below.
| Town/Borough | Average prices |
Annual change |
|---|---|---|
| Kensington And Chelsea | £1,501,966 | 17.1% |
| Bexley | £342,626 | 9.0% |
| City of Westminster | £1,076,320 | 6.8% |
| Havering | £359,358 | 6.6% |
| Hackney | £549,302 | 6.5% |
| Enfield | £405,788 | 6.2% |
| Bromley | £450,041 | 5.8% |
| Barking & Dagenham | £283,692 | 5.8% |
| Harrow | £476,656 | 5.6% |
| Waltham Forest | £425,136 | 5.4% |
Gains made in Kensington And Chelsea can benefit the older homeowner allowing the equity release buyer to access this wealth using a lifetime mortgage to improve their quality of life, home improvement or buy a more expensive home.
A number of boroughs are lower including the City of London down -3.1%, Wandsworth lower by -1.9%, Greenwich down -1.8% and Tower Hamlets lower by -0.7% over the year.
Property sales slump 44% for the year
The number of property sold in England are down by 44.3% year-on-year reducing from 111,901 in March 2016 to 62,342 this year.
London experienced a more severe decrease with sales of 16,322 last year reducing to 6,941 to March 2017 or 57.4% lower.
The fall in sales may have helped property values to keep rising as the following table from the ONS shows average prices and annual change for the UK to May 2017.
| Region | Annual change |
Average prices |
|---|---|---|
| London | 3.0% | £481,345 |
| South East | 4.8% | £315,807 |
| East of England | 7.5% | £284,097 |
| South West | 5.5% | £243,969 |
| England | 5.0% | £237,662 |
| West Midlands | 5.3% | £183,942 |
| East Midlands | 7.2% | £180,903 |
| Yorks and the Humber | 4.4% | £155,268 |
| North West | 3.8% | £153,297 |
| Wales | 3.8% | £149,817 |
| Scotland | 3.5% | £143,106 |
| North East | 1.6% | £126,738 |
| Northern Ireland | 4.3% | £124,007 |
The downside to rising house prices for first time buyers is that it makes it harder to get on the property ladder as they would require a larger deposit or higher earnings to purchase their first home.
Sales figures for last year were boosted as buy-to-let landlords brought forward purchases ahead of the changes to stamp duty land tax (SDLT).
Even so, sales volumes for the year to March 2017 remain the lowest over the last four years as home movers may be put off by the lack of homes on the market and economic uncertainty.
This is confirmed by the Royal Institute of Chartered Surveyors (Rics) reporting that new sales instructions remained negative for the fifteenth month in a row.
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 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 repay an interest only mortgage, holidays or home improvements.
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