UK House prices continue to rise in 2018

UK house prices continue To rise in 2018, still continuing an upward trend over the year; despite lack of enquiries and sales volumes falling. Simon Rubinsohn, RICS chief economist, says: “Lack of inventory on agents’ books continues to provide a major challenge with the number of valuations being undertaken not suggestive of a pick-up in new supply anytime soon.” However, UK property market is showing resilience in tough conditions. What’s more, asking prices have continued to rise. Rightmove say asking prices increased by 0.8% between January and February 2018. Furthermore, the price paid for properties, is also up by 0.4%, according to latest Land Registry data for December 2017.

Key Statistics

UK House Price Index for December 2017: House prices up by 5.2% annually. Average price of a UK property: £226,756. Monthly change: +0.4%. Halifax House Price Index, January 2018: House prices up by 2.2% annually. Average price of a UK property: £223,285. Monthly change: -0.6%. Nationwide House Price Index, January 2018: House prices up by 3.2% annually. Average price of a UK property: £211,756. Monthly change: +0.6%. Rightmove House Price Index, February 2018: Asking prices up by 1.5% annually. Average asking price of a UK property: £300,001 Monthly change: +0.8%. Miles Shipside, Rightmove director and housing market analyst, says. “This month’s rise of 0.8 % is well below the 1.6 % monthly average at this time of year over the past 10 years; it is wise for sellers to be cautious and not to over-price given stretched buyer affordability.” Furthermore: “The average price of newly marketed property in the Midlands is up by over 5% compared to a year ago; a marked contrast to parts of London and its commuter belt.”

House prices up by £12,000 over the year

The latest figures from the UK House Price Index (UK HPI) for December reveal that property prices went up by 5.2% over the year. It puts the average property in the UK at £226,756.

Shortage of properties ‘will underpin house prices’

Halifax reports annual house growth to January of 2.2%. With the average price now £223,285. Russell Galley, managing director of Halifax, says that despite a slowdown in the market, a shortage of housing will help prop up prices. He says: “Annual house price rises have slowed from 2.7% in December to 2.2% in January, the lowest rate since July last year. We’ve seen a monthly decline as well as the quarterly rate of growth flattening out.”

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With the shortage of properties on the market, UK house prices will continue to rise in 2018 “Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages. Additionally, it’s still too early to see any impact for first-time buyers from the abolition of stamp duty on purchases of up to £300,000, which was announced in the November Budget. “Despite the recent rise in the Bank of England Base Rate, mortgage rates are still very low. This, combined with an ongoing acute shortage of properties for sale, will continue to underpin house prices over the coming months.” But Jeremy Leaf, a north London estate agent and a former RICS residential chairman, says that the market is doing better than Halifax’s figures suggest. “Prospective purchasers seem to be taking confidence from recent encouraging news about the economy and continuing low interest rates. “Once again the market is showing considerable resilience and little sign of a larger correction. Nevertheless, sellers still have to be realistic and particularly recognise the importance of setting sensible asking prices if they are to generate offers.”

‘Surprising’ house price growth

Nationwide reports that the annual rate of house price growth went up by 3.2% in January 2018. With prices up by 0.6% over the month, the average house price is now £211,756 .Robert Gardner, Nationwide’s chief economist, says that he is “a little surprised” at how fast house prices have risen, given the squeeze on household incomes and a decline in mortgage approvals during December. He says: “Activity has been subdued on both the demand and supply side of the market. The flow of properties coming on to estate agents’ books has been more of trickle than a torrent for some time now and the lack of supply is likely to be the key factor providing support to house prices.” However, Sam Mitchell, CEO of HouseSimple.com, believes that it is not just a lack of supply that is propping up the market. He says: “Across the UK, there are micro property markets seeing healthy price growth because houses are affordable and job prospects are good. Thriving regional business hubs are attracting skilled workers, many from London, because, among other things, homeownership is a reality. “The UK property market is no longer all about London, which is no bad thing, as the impact of a hard-Brexit is likely to hit the capital harder than anywhere else in the country.”

UK’s Prime Minister, Theresa May’s Stance On Property

The PM will address the demand for property, and calls for House builders and property developers to “Do their duty”

May Warns, developers failng to build on sites approved for development could affect future their future planning approvals.

“I expect developers to do their duty to Britain and build the homes our country needs,” May will say, according to extracts of her speech released in advance.

“I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.”

Britain’s largest house builders have reported bright starts to 2018 in recent weeks. But May has targeted 300,000 homes to be built per year, which is well above the 2017 figures of 217,000.