House prices end 2016 up 7.2%, say the official figures

Property prices ended 2016 at £219,544, according to Land Registry figures.

The Land Registry’s House Price Index showed prices were up 7.2% year-on-year for December 2016, but just 1.1% up on a monthly basis.

In line with other indices the East of England saw the biggest price growth between December 2015 and 2016, up 11.3% to £281,513. Prices in London grew 7.5% annually to £483,803.

Average prices in England were up 7.7% to £236,424 and Northern Ireland was up 5.7% to £125,480. Property in Scotland saw an increase of 3.5% to £141,553, while Wales was up 4.7% to £148,177.

Sales volumes painted a less positive picture, albeit just for the latest available data from October 2016.

Transactions for England were down 34.5% year-on-year in October to 58,853. Volumes dropped 25.9% in Wales to 3,415 and fell 14.7% to 8,329 in Scotland, while they were down 17.6% in Northern Ireland to 5,081.

Ben Madden, managing director of Thorgills, said London and the East were driving the property market.

He said: “House prices rode choppy political waters to finish in a far better place than anybody would have predicted at the end of last year.

“Even though an essential lack of supply – coupled with low mortgage rates – continue to prop up prices, this is surprisingly robust growth during uncertain times.

“London and the East continue to drive this, with commuter towns such as Basildon far outpacing regional increases with an annual rise of 17.3%. The peripheries of London and satellite towns will continue to benefit from the capital’s overheated core as house-hunters look for more affordable alternatives.

“This expanding affordability radius is also benefitting from key infrastructure projects, such as Crossrail, which are making routes into the capital much more accessible.”

Commenting on the figures, Lucy Pendleton, of agents James Pendleton, said: ‘The annual increase in house prices by 7.2% in December is at the lower end of scale compared with the average over the past ten years, but was expected considering the events of 2016.

“The 44.9% fall in the number of completed house sales in London in October is higher than we were expecting and shows the uncertainty ******* the market, caused by the referendum, higher stamp duty, lack of confidence and fewer investment buyers given the higher cost of buying due to the stamp duty surcharge. There is also concern among landlords as to where the market is going to go with changes to mortgage interest tax relief likely to hit them hard.

“As for what we are seeing this year, realisation has dawned that we are going to have Article 50 whether we like it or not, so buyers are steadily returning to the market.

“It is what it is and in south-west London in particular there are too many positives to make people hold off purchasing or moving. Your children do grow up and they do need to go to school and what was a good-sized house may no longer be.

‘With so many very attractive mortgage products being launched on a weekly basis, there is plenty to entice borrowers who wish to fix for a number of years for certainty at rock-bottom rates.”

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