UK prices are once again likely to grow over the course of the next few months as it goes. The Land Registry has reported a return to growth in the months to come. A 0.9 increase followed by a 0.8 fall during the month of March has taken the average price for a home in England and Wales up to a £179,817 price tag. Regardless of that increase the annual growth rate has fallen to a low of 5.1% in total. This doesn’t make things easy for new buyers on the market planning moving to a new home or area. The same goes for investors on the market looking to find new properties for flipping or renting purposes, which in turn will also affect other business fields such as removals.
Since the boom conditions have returned to the market, chances are the Bank of England will likely wait until the end of the year to see the impact of the current budget for July before the potential interest rates are on the rise. There is a rising income and falling arrears, which may work on boosting the supply of home loans and prices when paired with the mortgage lenders competition, according to F&C Investments’ chief economist Steven Bell.
The current market conditions are forcing the Bank of England in front of a binary choice: either raising the base rates early on, thus introducing more prudent measures or risking the appearance of another property price boom which would affect the market even more negatively. The need of a strong housing market is an indicator for loose financial conditions which would affect the rest of the economy, according to Mr. Bell.
The Land Registry data has been based on repeated sales, but that doesn’t really include the new-built homes, but it does show some pretty significant leaps in the overall prices around the country. The area of Yorkshire and the Humber has seen the largest increase of monthly prices back in April where they jumped with a 2.7% over the course of the month all the way to an average sum of £123,471.
London prices also rose by another 2.3% to an average of £474,544, making the annual growth of prices in the capital at double figures of 10.9%. Combining that with a 2.1% rise in the northwest of England and we are seeing difficult times ahead for potential home owners, families moving to new areas and homes and businesses. Prices did take a small fall in the northeast parts of England and Wales with 0.5% and 1.1% respectively.
The last transaction figures of the Land Registry covered back in February have showed a 17% fall in the overall sales across the price brackets, which is understandable with the current housing situation. The largest drop of prices was for homes with prices exceeding two million pounds, facing the direct implementation of the mansion tax had Labour won the general election back in May. As it stands the price bracket for a number of sales have fallen down by 30% at 146 at this time.