Property

UK house prices see steepest monthly and annual increase on record

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29th December 2015
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According to the latest report from Haart, UK house prices have risen 13.4% annually and 3.7% on the month to pass the £230,000 mark for the first time - reaching £231,857.

There has been a 7.5% annual increase in the number of new buyers. Meanwhile, the supply of properties has declined by 3.1% in just one month, resulting in fierce competition.

While viewings fell 4.5% on the month in November, sales increased 0.5% over the same time period. This indicates that buyers entering the market are becoming increasingly serious and are seeing fewer properties before placing an offer.

First-time buyer house prices have risen 1.1% on the month and 0.2% annually to reach £166,581.

National

November 2015

% change since October 2015

% change since November 2014

Ave UK house prices £

(SSTC)

231,857

3.7

13.4

Ave FTB house prices £   

(SSTC)

166,518

1.1

0.2

London house prices £

(SSTC)

525,780

3.4

12.3

House sales (exchange)

60,386

0.5

-5.4

Ratio of new buyer demand to property supply

11.5:1

-4.1

8.8

The number of first-time buyers has fallen 7% in the last month as a result of competition with buy-to-let investors. The number of first-time buyers as a percentage of all mortgages written has fallen to 40.4% from 42.5% a month ago.

However, on a positive note for first-time buyers, the average deposit for a starter home has declined 2% in the last month and 2.3% in the last year.

Paul Smith, CEO of haart, had this to say: “UK house prices rose 13.4% annually and 3.7% on the month to break records again in November. This is the steepest monthly and annual increase on record and follows a surge in registrations from buy-to-let investors since the Autumn Statement in anticipation of the 3% stamp duty surcharge which is effective from the 1st of April 2016. This could mean the stamp duty payable on a property worth £275,000 could rise from £3,750 to £12,000.

Although first-time buyer house prices have remained relatively stable, up just 1.1% in the last month, I expect these to shoot up over the coming months as first-time buyers face fierce competition from buy-to-let investors. The pressure is already being felt by many with demand among first-time-buyers already down 7% in the last month alone. While first-time buyers may face a tough couple of months, once the stamp duty changes come into effect in April, demand from buy-to-let investors is likely to recede so we should see a recovery in prices at this level.

Our branches have begun to see the migration of first-time buyers from traditional hotspots as they search for more for their money. Buyers priced out of Romford for example, are moving to Leigh-On-Sea.”

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