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UK house price growth continues to defy post-Brexit gloomy forecasts

Residential property prices in the UK increased by an average of 7.7% in the year to September, according to the latest Office for National Statistics (ONS) statistics.

The increase in property values matched the level of growth recorded by the ONS in the year to August.

Home prices rose by an average of 0.2% month-on-month in September, compared to 1.3% in the month to August.

According to the House Price Index, the average price of a residential property in the UK was £217,888 in September, around £16,000 higher than the corresponding month last year, fuelled mainly by growth in England, where home prices increased by 8.3% in the year to an average of £234,000.

Wales saw property prices increase by an average of 4.4% in the year to £146,388, while in Scotland, the average price rose by 3.4% to just over £143,000.

The average price of a home in Northern Ireland has hit £124,093, after increasing by 5.4% over the year.

“Despite the predictions, the ceiling hasn’t fallen in post-Brexit with house prices remaining fairly stable - a clear sign of resilience in the market,” said Rob Weaver, director of investments at property crowdfunding platform Property Partner.

In London, the average price of a property hit £487,649 in September, rising 1.4% compared to August, and up 10.9% over the year, while the East of England also saw annual price increases in double digits.

Prices rose in almost every part of the UK in September, except in the North East, the South East and Yorkshire and the Humber.

“It’s a reflection of a widening divide with the North, although September’s figures for the South East show an unusual dip, somewhat of a monthly aberration to past performance,” Weaver added.

The growing imbalance between supply and demand continues to be the main driver of the rise in property prices, and growing fears that the government will not hit its 2020 target of building one million new homes “will only intensify the problem”, according to Weaver.

Reflecting on the latest data, Jonathan Hopper, managing director of Garrington Property Finders, commented: “The headline figure is being buoyed by a combination of robust demand and severely squeezed supply – the number of homes sold in England has slumped by more than a quarter on the same time last year.”

But the real engine for rising prices is demand, according to Hopper who points out that the “promised spike in consumer inflation” has so far been modest, and buyer confidence is being boosted by record low interest rates, a solid labour market and an economy that continues to grow.

He added: “Many would-be buyers who had been holding off until the referendum dust settled have given up trying to second guess the Brexit saga – and are instead focusing on the market's strong fundamentals, and the knowledge that in many areas it’s a buyer’s market.

“Supply may be limited, but seller anxiety has shifted the balance of power firmly into the hands of buyers. With price cuts available for the bold, increasing numbers of buyers are deciding that now is the time to strike.”

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