The latest UK House Price index has been released this morning and has revealed that, despite a slight shift in the right direction with house prices, the average homeowner in the UK continues to play it cautiously with one eye on the Brexit clock.
According to this morning’s figures, average house prices in the UK increased by 1.3% in the year to August, a slight rise from 0.8% in July and remain below the increases seen this time last year.
The strongest annual growth was seen in Wales – up 4.5%, compared to 3.8% in July. Scotland saw average prices rise by 1.6%, up from 1.5% in the year to July, while the average price in England rose by 1.1%, up from 0.5% the previous month.Northern Ireland house prices increased by 3.5% over the year to Q2 and Northern Ireland remains the cheapest UK country to purchase a property in, with the average house price at £137,000.
Regionally, it was the capital once again that saw the lowest annual growth with prices slipping by 1.4% over the year, followed by the South East where prices fell by 0.6%.
The North East was the English region with the highest annual house price growth, with prices increasing by 3.3% in the year to August. This was followed by the North West, increasing by 3.1%.
On a non-seasonally adjusted basis, average house prices in the UK increased by 0.8% between July and August, compared with a rise of 0.3% during the same period a year earlier. On a seasonally adjusted basis, average prices saw a monthly rise of 0.6%.
As ever, the property market was quick to react. Here’s what they’re saying:
Kate Davies, Executive Director of the Intermediary Mortgage Lenders Association, comments: “More sustainable house price growth is good news for younger buyers saving up to buy a home, but it shouldn’t disguise the fact that there are still challenges facing the housing market.
The Queen’s Speech this week gave away very little on housing and as a nation we’re still building far too few homes – housebuilding is well below the 300,000 a year that we need to meet the demand from aspiring homeowners. Help to Buy is also due to end in 2023 and there is a clear need for the industry to come together – builders, lenders, regulators and the Government – to start a new dialogue on what could replace the scheme.
Innovation in the mortgage market is helping. Lenders are delivering new solutions such as family support mortgages that will help to fill the gap left by Help to Buy, but stringent affordability criteria continues to prevent many people from stepping onto the ladder.
With renewed talk about a possible election, housing is likely to be an issue debated and discussed as the political parties campaign for the vote. However, it’s vital that the next Government sets out a clear plan to address the issues facing the housing sector in the UK and puts the spotlight back on creating a market that is fair for all.”
Gareth Lewis, commercial director of property lender MT Finance, says: “The UK housing market needs the equivalent of a cattle prod stuck up it to gain some stimulus. At the moment, there is a dour outlook with little cheer. This is unsurprising given that for the whole of this year and before that we have all been obsessed with Brexit and the suppression it brings to people’s confidence.
Things are ok but they are only ever going to be ok while the everyday consumer is sitting there saying they aren’t going to take the plunge because they don’t know what is going to happen. This is particularly true in the south east – where will those property values be in 12 months’ time and how many people wish to take a punt on that?
We are hopeful but not confident that a deal will be done. And then maybe we will see a bounce back, although it may not be until next year because of timings and not many people wanting to move in December. Brexit may also give us an opportunity to review some of the more taxing European rules that have been imposed on the mortgage market.
House-price growth outside of London and the South East is relatively flat although holding up. It may be the case that London and the south east need more sensible levels of price growth in order to produce a more robust market, rather than boom and bust.”
Sam Mitchell, CEO at Housesimple, comments: “Make no mistake, house price growth in the UK has suffered amid the ongoing uncertainty and political turmoil of late. But the property market has been tested before, and time and time again it has proved its resilience. History has a habit of repeating itself and we mustn’t overlook that. Today’s ONS figures that show a month on month rise in house price figures are a testament to this.
Ultimately, strong economic fundamentals have been and will continue to offset headwinds – with low mortgage interest rates, good mortgage availability and wage growth all remaining positives for buyers. Those sat on the fence about selling before 31st October, or immediately after, should not be deterred. There are numerous factors that lead to someone buying a house, and regardless of the UK being in or out of the EU, people will still be looking to move up the property ladder.”
As speculation around the Autumn Budget begins to build, it is essential that the government doesn’t lose focus on supporting buyers and makes good on its promises of stamp duty changes. Whatever policy they choose, both buyers and sellers are tired of waiting around and it is time for some clarity.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “Although a little historic, these figures represent the most comprehensive snapshot of the UK property market of all the surveys. They show a small rebound from last month’s very weak numbers as the monthly and annual increase in prices are higher than the previous results. Sadly, this is nothing to get too excited about because the market remains relatively flat although of course the resilience is welcome, continuing to be reinforced by improving affordability and near record-low mortgage rates as buyers and sellers look beyond Brexit.
It is worth noting that a national average masks what is happening in local markets evidenced by the fall in prices in London by 1.4 per cent over the year compared with almost the whole of the rest of the country.”
Michael Stone, founder and CEO of Stone Real Estate, commented: “Some positive movement but a similar picture of a housing market in limbo and this will no doubt continue to be the case as we approach yet another B-Day. However, as we wait with bated breath for the final curtain to fall at the end of this month, a critics review of current market conditions could certainly be worse.
Property values remain robust for the large part, particularly across the new homes sector, and there continues to be an appetite for homeownership that stretches the length and breadth of the nation.
Despite London bearing the brunt of political uncertainty, the price of new build properties has grown at more than double the rate of existing stock since the referendum vote, with similar trends across the sector on a national scale.
This demonstrates the underlying strength of the market and all in all, we’re simply not seeing the abandonment of the UK property sector that many have predicted and this bodes well for life after Brexit and the year ahead.”
Marc von Grundherr, director of Benham and Reeves, shared his thoughts: “The closer we come to an apparent EU exit, the more likely it is that even the most fearless home buyer or seller will hold tight until the dust has settled, and so further downward trends should be expected until the start of next year at the very least.
Of course, much is dependent on the outcome and I don’t think anyone believes that come September we will be in any better a position than we are now, however, the world of the UK property market continues to turn and now is arguably a great time to buy, particularly in the capital.
Although London’s high-end has seen a decline in places, the bread and butter London buyer has been out in force, and a higher level of foreign investment due to a weaker currency has seen house prices remain buoyant in the majority of boroughs.
Those aspirational London buyers who remain sat on the fence over Brexit would do well to strike while the iron is, well uncertain, as we will only see market values strengthen as time goes on.”
Shepherd Ncube, founder and CEO of Springbok Properties, had this to say: “Away from the slapstick antics of Westminster people have long grown weary of the horror stories surrounding the UK property market and, in fact, for the average UK homebuyer, current conditions are close to idyllic.
The affordability of mortgage products remains favourable thanks to consistently low interest rates and while the rate of price growth may have slowed, you will do well to find a bad bricks and mortar investment outside of the M25.
We’ve grown accustomed to astronomical annual increases in property values and while this is great for homeowners, it does little to address the current housing crisis and the monumental task of getting a foot on the ladder.
While prices remain far from affordable for many, those looking to get on the ladder would be forgiven for asking for a bi-annual Brexit just to help reduce the ever-escalating financial hurdle of home buying.”
Josef Wasinski, co-founder of Wayhome, said: “These figures will come as yet another blow to aspiring homeowners, placing the dream of homeownership further out of reach. The reality is that without the Bank of Mum and Dad, or vast savings, the options are either continuing to rent or buying a property which isn’t suitable.
At the moment, many have no choice but to stay a part of ‘generation rent’. We need to see real commitment from the government to address the issue. This includes innovation in the sector which offers options to those looking to secure their futures.”