House prices in the United Kingdom have been rising for some time, but the tide may finally be turning as that growth starts to slow down. The latest official sales figures show there is a change in the pattern of price growth, but is this a bad thing, and is it here to stay?
This year, average UK house prices have continued to rise, but this is happening at a slower rate than before. The trend for this began halfway through 2016 and has continued through to April this year so far. That particular month saw an increase in the average house price of 1.6%, which now takes the average property investment over £220,000 for the UK as a whole.
Where Are The Price Rises?
These very revealing figures put average prices at £12,000 more than at the same time the previous year, and this largely seems to be coming from a 5.7% growth in England. Scotland saw prices rise by 6.8% whilst the Welsh economy felt a 4.2% increase. The North East of England continues to boast the lowest average house price in the country as well as the lowest annual growth of just 0.6%.
The highest annual growth can be found in the East of England where an 8.1% increase to an average price of £315,000 was closely followed by the South West’s growth of 6.8%.Of course, the highest average house price can be found in London, which currently stands at £483,000. The number of seasonally adjusted property transactions completed in the UK with a value of £40,000 or above increased by 20.3%, however, this is skewed by the low level of purchases made in April 2016, which was brought about by changes to the Stamp Duty laws.
The latest figures for house sales in England show that the number of completions dropped by more than 18% in February this year, whilst Wales and London also saw falls of 8.8% and 26.8% respectively.
This all points towards an ever increasing gap between house price inflation and affordability, and it is first time buyers who will feel this the most, with many turning to family for help with deposits or losing out on the chance to buy at all.
The unstable environment brought about by the general election is likely to make people cautious for a while yet, the UK housing market has proved resilient in the face of many different changes such as the decision to leave the European Union.
The inflation behind house prices is very much still driven by the huge difference in supply and demand. With a rapidly growing population, the lack of affordable housing becomes painfully obvious, and simply continues to drive the prices of the property we do have higher and higher still. The construction of more affordable homes is one of the best ways to allow a larger number of buyers to get onto the first rung of the housing ladder, or indeed, take the next step up it.