House prices up by 2.9% in Q1 of 2016

Data released today indicates that the average UK house price now stands at £214,811, with annual property value growth hitting 10.1%.

The report from the Halifax also shows that average property values rose by 2.6% in March, in comparison to the previous month. What’s more, prices in the first quarter of 2016 were 2.9% greater than those recorded in the last three months of 2015.

Annually, the rate of growth increased from 9.7% to 10.1%-the greatest yearly increase since the three months to July 2014.

Rush

Observers suggested that the rush of buy-to-let investors striving the beat the Stamp Duty increases deadline contributed significantly to driving prices up.

However, there could well be a lull in price rises over the next two months. Martin Ells, Halifax housing economist observed, ‘worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months.’[1]

Howard Archer, chief UK and European economist at business research firm IHS, also noted, ‘post April, a likely warning of buy-to-let and second home interest may modestly dilute housing market activity and ease upward pressure on prices.’[1]

Spiralling demand

Long term, house prices are very likely to continue to rise, with demand outstripping supply in the majority of regions.

Mr Ellis added, ‘current market conditions remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming onto the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate that house price growth is set to remain robust.’[1]

By property type, prices of flats have risen more markedly than any other since 2008, rising by 57% over the period. This was in comparison to 37% for residential property as a whole. Detached homes having risen by 20% in the same timeframe, with terrace and semi-detached houses recording rises of 38% and 34% respectively.

[1] http://www.theguardian.com/money/2016/apr/07/uk-house-prices-pick-up-pace-101-annual-increase-halifax-brexit?utm_medium=twitter&utm_source=twitterfeed