by Housesimple on 25th May 2016
What next for surging UK house prices?
The Office for National Statistics (ONS) reported house prices had risen by 2.5% in March, bringing the annual price rise to 9% and pushing the average cost of a home in the UK up to £292,000. But will the rise continue?
The impact of stamp duty
The Council of Mortgage Lenders has reported that lending to landlords jumped by 87% from February to March. The ONS believe that this may be down to landlords and buyers of second homes rushing purchases to avoid the extra 3% stamp duty introduced for second home owners, a trend that pushed up prices during this period. While some might conclude that prices will level out over the coming months, there is one big political event that could have an impact in the longer term.
The Royal Institution of Chartered Surveyors reported a fall in new buyer inquiries in April due to uncertainty over the UK referendum on EU membership. The news was quickly followed by Chancellor George Osborne’s public warning that a Brexit would cause UK house prices to fall by between 10% and 18%. This will likely fuel further caution in the property markets, at least until the referendum. In the meantime, those who want to estimate where their house price will go over the next year may find several underlying trends useful.
The continued shortage of homes across the country will only become more important after the surge in activity this March. As Nationwide’s Chief Economist Robert Gardner put it, “the stock of houses on estate agents’ books remains close to all time lows”. This suggests that prices are likely to continue rising until more new homes appear on the market.
However, homeowners should also be aware that since 2011 house prices have risen five times faster than wages, meaning homes are becoming less and less affordable. A trend that will eventually put pressure on price rises.
There's also a widening regional divide. The March surge was driven primarily by the south east and London, while the north east and Scotland saw prices fall in the first quarter. Homeowners looking to sell should pay close attention to local trends to judge a realistic value of their home.
For expert help on establishing the value of your property, sign up to HouseSimple.com today.
Get a FREE no obligation valuation visit from our Local Property Expert
Want to hear about breaking news, industry updates and useful tips? Enter your email below