So Much For a Slowing Market - House Prices Are Up More Than Expected

Despite a string of property pundits suggesting the market is slowing down, new figures from the Office for National Statistics show a gentle increase.

Prices increased 5.2 per cent in 2017 according to ONS data just released, a rise from the 5.0 per cent in the 12 months to the end of November.

The average UK house price was £227,000 in December 2017, up £1,000 from the previous month and £12,000 more than in December 2016.

Scotland and south west England showed the highest annual house price growth, registering 7.7 per cent and 7.5 per cent respectively.

In terms of the UK nations, average prices in England rose 5.0 per cent to a typical £244,000; Wales saw an increase of 5.4 per cent to stand at £154,000; in Northern Ireland prices grew 4.3 per cent to £130,000.

Separate figures from UK Finance suggest that 2017 saw the highest number of first time buyers (365,000) than at any time for 11 years, following a 7.4 per cent rise over 2016.

However the former RICS residential chairman Jeremy Leaf, who has an agency in north London, insists the ONS figures do not tell the whole story.

“December results are notoriously difficult to use to identify a trend because of the peculiar nature of the festive season where people often put decisions on hold. What we do know is that this year has started fairly typically in that viewings and instructions are up although buyers are naturally nervous about making commitment until they see which way prices are moving” he says.

Another London-based agent, James Cameron of Vesper Homes, says the uplift in first-time buyers seen last year is no surprise.

“We have sold a number of flats to those getting on the ladder for the first time. When it comes properties costing less than £350,000 in London, once you take into account taxes, agent fees and mortgages it doesn’t make it economical for landlords to rent them as they just cover the cost. Landlords are therefore selling up so they can invest outside of London or trade up to a larger property which frees up the smaller ones for first-time buyers.”

Meanwhile Nick Leeming, chairman of Jackson-Stops, says the high growth seen in the south west is indicative of the year to come. “Our West Country branches expect this region to be a hotspot for further growth in 2018 – especially the middle market where some foresee a further 4.0 per cent rise in prices. The Cotswolds in particular will thrive this year as it continues to attract high levels of demand from families who have been outpriced by surrounding areas or are finding their homes in the capital are no longer making more money than them and are now in search of a change of pace and lifestyle.”