The average property value in England and Wales increased year-on-year by 6.4% in December, according to the latest monthly index report from the Land Registry.
This took the typical house price to £188,270 as month-on month, values rose by 1.2%.
Rise and fall
London recorded the largest increase in average house prices, with an annual growth of 12.4, coupled with a monthly rise of 2.1%, taking the typical price in the capital to £514,097.
The North East saw the lowest annual price growth, with a rise of just 0.8%. This took the average price in the region to £99,069. Wales was the region with the largest month-on-month fall, with a decrease of 0.8%, taking the average price of a property in the country to £121,780.
However, the number of completed house sales in England and Wales dropped by 8% to 79,960. In addition, the number of £1m plus properties sold fell by 2%.
Repossessions also fell by 51%, with London recording a 71% decline.
Average property prices in England and Wales up 6%
Activity
Mark Posniak, managing director of Dragonfly Property Finance, pointed out that with high demand and weak supply continuing in December, the usual seasonal slowdown was more muted.
‘On a more positive note, we are seeing noticeably more construction activity at the moment, particularly by smaller developers. But this will take time to trickle through into the market,’ he noted. ‘Looking into 2016, it’s hard to see anything other than a continuation of the current trend of steadily rising prices, especially with interest rates unlikely to rise in the near future and a robust jobs market.’[1]
John Eastgate, sales and marketing director of OneSavings Bank feels, sustained demand is driving the growth in values. He said, ‘a strengthening labour market, robust consumer sentiment and a supportive mortgage market all played their part, despite the obstacles provided by the festive period. This strength of demand has been compounded by the record low levels of property on the market at present.’[1]
Caution
‘Uncertainty around economic growth in 2016 provides a reason for caution. The good news however, is that house building starts appear to be at their highest level since 2007,’ he continued. ‘It is not yet strong enough to counterbalance demand. However, if this trend of improvement is maintained, it should lead to a healthier property market for investors and buyers alike.’[1]
Jonathan Hooper, managing director of buying agents Garrington Property, also believes a lack of supply is the issue. He pointed out that, ‘even though the NHBC this week announced that house building in 2015 hit its highest level since 2007, the supply of homes is still falling far short of demand.’[1]
[1] http://www.propertywire.com/news/europe/england-wales-property-prices-2016012911497.html