Homeowners across the UK have had an average of £7,500 added to the value of their property over the past year, and experts expect house prices to continue to rise in the country’s more affordable areas.
The national average sold house price is now £225,000, which is 4.4 per cent higher than a year ago, according to the latest Land Registry figures.
But the national picture disguises regional variations, with London recording its first price fall since 2009.
FASTEST GROWING AREAS
Northern Ireland, Scotland and Wales all reported higher house price growth than England. Prices in each of these regions were around £100,000 lower than in England.
With high employment and Office for National Statistics showing the year-long squeeze on wages may be coming to an end, economists believe there is still room for house price growth in the UK’s less expensive areas.
“We broadly expect current market conditions to continue, projecting UK-wide house price inflation to be around four per cent in 2018,” said Thomas Fisher, economist at PwC:
House price growth was highest in the West Midlands at 7.2 per cent over the past year, taking the average to £193,000.
This was closely followed by the East Midlands, where an annual rise of 6.3 per cent led average property values to rise to £187,000.
Property experts largely attribute this growth to better affordability in these regions.
“We expect house price growth in these areas to continue, despite Brexit uncertainty and possible interest rate rises, because, unlike in parts of London and the South East, average earnings have kept pace with house prices in these areas, so property is more affordable for average buyers,” says Alan Collett, fund manager at Hearthstone Investments.
London was the only region to experience house price falls. Prices in the capital were one per cent lower than a year ago, the first annual price drop since the financial crisis began to affect the London property market in September 2009.
However, at £472,000, homes in the capital still cost more than double the UK average.
Jeremy Leaf, north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, said: “We are seeing a two-tier market developing, with higher national property prices masking stagnating, or even falling prices, in London.
“As a result, the old north-south divide is turning on its head, with northern areas steaming ahead much faster than the rather sluggish south.”