"So far so good. This official data reveals a post-referendum property market that may have gone off the boil but is bubbling away nicely"
According to the report, average UK house prices were sitting at £218,000 in September 2016 - a £16,000 higher than in September 2015. As expected, London continues to be the region with the highest average house price at £488,000. The capital saw a 1.4% month-on-month growth in its house prices – the fastest rate of any region.
In Croydon house prices have risen from £320,175 to £373,339 year-on-year (16.6%), particularly bad news for those in the area attempting to take their first step on to the property ladder. Elsewhere in the capital the picture for first time buyers was not much better as average house prices in London have risen 11% year-on-year.
Nick Davies, Head of Residential Development at Stirling Ackroyd comments on the ONS UK house price index: “While house prices have remained flat from the previous month for most of the country, in London they continue to rise. The capital is seeing the fastest monthly growth in house prices of any region. Homeowners in London should feel relieved that the current economic uncertainty has yet to impact the house prices. New build properties in London have seen a 23% upswing year-on-year, which is encouraging for developers, but emphasises that not enough new properties are being built. However, for those hoping to get their first foot on the property ladder, the dream of homeownership is more distant than ever.
The majority of the growth in London’s house prices is coming from the more affordable parts of East London and the outer boroughs. In Gavin Barwell, the Housing Minister’s constituency, house prices have jumped 17% year-on-year – equivalent to £53,164 – this is almost double the average Londoners salary, highlighting the challenge he faces. As these boroughs are usually areas chosen by first time buyers, they’ve seen some of the steepest increases, rising 11% year-on-year in London. This means that most first time buyers in London fall into the 5% stamp duty band – a clear failing of a Government supposed to support homeownership. The Government should consider scrapping stamp duty or raising the tax bands, if they want to help Londoners achieve homeownership.”
Graham Davidson, managing director of Sequre Property Investment, said: “House price growth remains stable in September but that doesn’t tell much of the story, instead we should be looking at the previous ongoing monthly and indeed year on year growth, which presents a positive picture reflective of a resilient wider economy. The Bank of England reported that mortgage approvals hit a three-month high in September which is telling of a market that is moving. Now, with the Autumn Statement looming, we may see a raft of announcements aimed at further boosting the market, such as a Stamp Duty amendment – something that many are calling for.”
Jonathan Hopper, managing director of Garrington Property Finders, comments: “So far so good. This official data reveals a post-referendum property market that may have gone off the boil but is bubbling away nicely. Notable hotspots remain in certain areas, and East Anglia’s 12.1% annual growth rate is now the exception rather than the rule.
But the conclusion is clear – four months on from the shock Brexit result, and the sky has resolutely refused to fall in. In fact, annual rates of price growth remain comfortably above where they were a year ago.
Look deeper though and 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. The promised spike in consumer inflation has so far been modest, and buyer confidence is being boosted by rock bottom interest rates, a solid labour market and an economy that continues to grow.
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.”
Russell Quirk, founder and CEO of eMoov.co.uk, had this to say: “Interesting to see London back behind the wheel and driving the UK property market once again, with the largest monthly increase. This, along with a number of other industry data sets, shows that the capital suffered from wobbly knees post-referendum but now seems to have well and truly found its feet again. It will be interesting to see if a few reports from now, Trump’s victory has any notable direct influence on the UK property market.
We predict a slight price peak at the top end of the market, particularly in London, but little more than that.
Elsewhere across the country strong annual growth all-round. Interestingly the UK seems to be suffering from some form of property paralysis across the east, with both the South and North East seeing a monthly fall in prices, along with Yorkshire and Humber.”
Tal Orly, CEO of Cogress, said: "The latest data from ONS reinforces what other recent indices have continued to show; that the dust seems to have settled after the referendum result. Rather than seeing any significant fall in overall property values, the ongoing strong growth in house prices can be attributed to the favourable combination of strong buyer confidence, record low borrowing costs and interests rates, along with a continued supply shortage.
While we can attribute the slight dip to prices of prime London property to the stamp duty rise, as seen in Hammersmith and Fulham with its 2.9% decrease. This is being offset by a surging demand from foreign investors and buyers taking advantage of the sterling’s vulnerability to invest in London’s property market."
