ONS: London house prices continue to rise

London house prices rose by 1.8% and 8.1% on a monthly and yearly basis in November despite reports of price growth slowing in the capital, the government’s UK House Price Index shows.

UK prices rose by 7.2% in the year to November, up from 6.9% in October, while they rose by 1.1% from October 2016.

Russell Quirk, eMoov chief executive and property expert, said: “London, in particular, has managed to shake off the constraints of stamp duty changes and Brexit angst to continue the upward price growth trend, despite many predicting storm clouds on the horizon for 2017.

“It would seem those with the higher average house price are more inclined to sit on the fence and wait out any period of uncertainty in the market, whilst those elsewhere around the UK are benefitting from their “get on with it” attitude.”

The East of England (10.5%) led the way on house price growth, followed by the South East (8.6%) and London (8.1%).
The North East (3.2%), Yorkshire and the Humber (5.1%) and the North West (5.2%) saw the slowest growth.

The biggest monthly rises took place in the West Midlands (2.2%), London (1.8%) and the East Midlands (1.7%), with the lowest being in the South East (0.3%), the South West (0.5%) and the East of England (0.9%).

Robert Grigg, managing director of property finance at Hampshire Trust Bank, said: “While today’s figures demonstrate that the housing market remains strong, rising house prices will continue to be a barrier for those looking to take their first step onto the property ladder.

“We need to make home ownership more affordable and we believe that SME housebuilders are key in meeting housing demand.

“To achieve a step change in housebuilding, housebuilders need to work with specialist lenders that can provide flexible, swift decisions so they don’t miss out on that next development deal.

“Britain’s housing crisis is undoubtedly one of this government’s greatest challenges and only by working together we help open the door to home ownership for more people.”

Andrew McPhillips, chief economist at Yorkshire Building Society, expects price growth to slow in 2017.

He said: “Although house price growth remained strong in 2016, we expect demand for both residential and buy-to-let properties to dampen in 2017.

“We are therefore likely to see little movement in house prices over the coming year. On the residential side, people are likely to have less spending power due to a combination of increasing inflation and stagnant wages which will make it even more difficult for people to save for a deposit.

“In terms of buy-to-let, tougher affordability requirements and a reduction in tax relief for mortgage interest payments could make letting properties less attractive to investors.”

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Written by: Houseladder