The latest data from the Office for National Statistics has revealed that average house prices in the UK saw an increase of 5.2% in the year to December 2017 (up from 5.0% in November 2017).
According to the report, the average UK house price was £227,000 in December 2017 - up £12,000 than in December 2016 and £1,000 higher than last month.
Russell Quirk, founder and CEO of Emoov.co.uk, commented: "Another marginal drop in buyer enquiries, coupled with a continued shortage of new properties coming onto the market, has seen transaction levels continue to dwindle. However, it highlights the severe shortage of stock to satisfy even the most paltry of buyer interest, as prices remain stimulated by the imbalance of supply and demand levels in the market.
While London continues to see annual house prices growth slump there are a wealth of areas that have enjoyed double-digit growth, with the Orkney Islands not only leading the UK but Scotland as the region with highest annual price growth.
Despite sitting at the more unaffordable end of the market, Cambridge has seen the second strongest annual price growth in the UK.
The diversity of the fabric that constructs our overall market is clear to see, with areas across the nation from Eden to Edinburgh, West Dunbartonshire to West Dorset, Manchester to Chichester and much more all enjoying double-digit price growth over the last year."
John Goodall, CEO and Co-Founder of buy to let specialist Landbay said: “Demand in the property market has been reinforced by a wave of first time buyers capitalising on November’s stamp duty reforms. The changes have made it easier for aspiring homeowners to afford a place of their own, but over the longer term will likely push up prices for starter homes.
The housing crisis has long been linked to insufficient construction over the past decade, but macroeconomic factors are also starting to play a part. Wage growth has been slow going, while inflationary pressure is also hitting people’s pockets. Now more than ever, people are looking toward the private rental sector to support them while they save. Not only do we need to build more affordable homes for aspiring homeowners, but for the private rental sector as well.”
Jeff Knight, Director of Marketing at Foundation Home Loans, commented: “It’s not been the best start to the year for sellers. People are holding off until they are in a better position to make such a big financial commitment, held back by lack of disposable income. That doesn’t change the fact that property prices are still inflated, underpinned by the lack of supply, and pent-up interest will continue to nudge properties just out of reach for those hoping to buy – even with the cut to stamp duty.”
Ishaan Malhi, CEO and founder of online mortgage broker Trussle, had this to say: “By the end of 2017, the average house cost £12,000 more than it did in December 2016. The shortage of homes for sale has kept the property market competitive.
If you’re looking to buy in the coming months, it’s worth keeping an eye on the mortgage market. The cost of borrowing is expected to rise as certain bank subsidies fade away and interest rates climb. In such an environment, locking in a competitive five-year fixed deal will keep your repayments stable for the next few years while the country comes to terms with an increasingly uncertain economic future.”
Graham Davidson, managing director of buy to let specialist, Sequre Property Investment, comments: “Ending the year on a high, the increase of 5.2% only further cements why people should still be pouring into buy to let in 2018. A volatile stock market will push even more people to invest in property and despite changes to the tax law, buy to let is still producing high income. This simply reinforces its position as the number one investment choice.
Location is an important consideration for investors looking to maximise their profit, and the likes of Manchester and Liverpool are still the key cities for investment. A 5.9% growth in the North West is an impressive amount of capital growth and with strong tenant demand and high rental yields, it has long remained the place to be for buy to let. London’s downfall has only boosted the profile of the North West, something which we predict will continue for the long term.”
Paul Smith, CEO of haart estate agents, comments: “House prices soared in December, reaching £12,000 higher than the same time last year. Putting this into perspective, this is almost half the average UK annual salary, a sure sign that we should hold our confidence in the market. Our own branch data shows that registrations are up 10% across the UK in January, laying the ground for further growth in 2018.
Even London bounced back on the month in December. Buyers here were paying a £4,000 more to buy a home than those in November, an increase matched only by the North East. Perhaps an early indication of where the stamp duty cut will have the most profound effect.
Private housebuilding is up 9% on the year, and has grown by £81 million in the last month alone. In places like Cambridge which saw a 15% price increase over the last year due to a lack of stock and too much demand, this should make a real difference, and should really set the market flying in the coming year.”