The report confirmed that house price annual inflation was 5.6% in England, 0.8% in Wales, 2.9% in Northern Ireland and -0.9% in Scotland and that annual house price increases in England were driven by an annual increase in the East (8.8%) and the South East (7.4%).
Excluding London and the South East, UK house prices increased by 4.8% in the 12 months to August 2015. When seasonally adjusted, average house prices increased by 0.7% between July and August 2015.
The report also revealed that on average, first time buyers paid 3.8% more than in August 2014. For owner-occupiers (existing owners), prices increased 5.8% for the same period.
Adrian Gill, director of Reeds Rains and Your Move estate agents, comments: “The speed of house price growth across England and Wales may not be setting the world alight, but it’s certainly showing it has stamina – and continues to outdo rises in wages and consumer prices.
This growth is primarily being underpinned by sturdy demand and solid activity at the bottom of the property ladder. The cheaper northern regions are experiencing the fastest growth in property sales, while a shortage of property stock on the market in the south is slowing activity. The most frequently paid property price across England and Wales is just £125,000, mirroring the level at which stamp duty becomes payable, and reflecting the impetus that has been injected in the first-time buyer market recently. It is also the lower to mid-range properties priced between £180,000 and £360,000 which are seeing the fastest increases in value, while the shift in stamp duty bands continues to slow growth at the higher end of the market, and prices above £600,000 are largely stationary.
Despite this, London is firmly back in the driving seat of property price rises, following a slight pit stop, and is having a much greater influence on national measures of price growth on an annual basis. As in the rest of the country, it’s the more affordably priced London boroughs which are behind this renaissance, as the strengthening of sterling, rising stamp duty rates and moves against non-doms take their toll on the high-end market.”
Paul Smith, CEO at haart estate agents, comments: “Today’s data shows current occupiers have seen a near 6% annual increase in the value of their home on average. Based on the price of an average home according to our data, this amounts to about £12,700 – or around half the average annual salary. However, while buyers may be tempted to hang on to their current property in the hope that the equity will increase further, for those upsizing the incremental increase in price on their next home will be even more substantial. We are currently seeing a back-log in the supply of new homes and the mix of stock out there is not currently fulfilling the needs of the population. If people see that it may actually be disadvantageous to hold out on selling-up and moving on in the hope that house prices will increase further, we may see more homes suitable for first-time buyers coming onto the market.”
Lora Roberts, portfolio manager at estate agent Ascend Properties, said: “Despite seemingly bleak figures on paper, both the sales and rentals markets are in good health.
On the surface, news that’s prices paid by first time buyers are up 3.8% on the same day that inflation has been announced as turning negative again might appear bleak on paper but the reality is that we are seeing a healthy and fluid market across both sales and lettings. We are seeing signs of increased confidence across the board, with enquiries up for both segments of the market.”
Peter Rollings, CEO of Marsh & Parsons, comments: “Property price growth is showing a solid performance, and following suit with sensible and steady price rises over the summer months. With every region except Scotland reporting house price growth on an annual basis, and property values at record highs in the majority of regions, there’s every reason for optimism.
“Recent changes to stamp duty has slowed the top-end of the Prime London property market. But, while average house prices in the capital have come down from peak levels, they are still ahead of the pre-recession highs and up more than 45% since the crash. The neighbouring regions of the East and South East are setting the pace at the moment when it comes to annual growth, but the capital’s trump card will continue to be the lower priced suburbs where demand for first-time buyer homes and more affordable properties is thriving.”
