UK house prices up despite uncertainty.




UK House Prices up Almost 5% Despite Political Turmoil

Growth in UK house prices has slowed but remains close to 5%, with faster growth seen outside London, according to official data.

UK House prices increased nationwide by an average 4.7% in the year to May, hitting an average of £220,713, the Office for National Statistics (ONS) said. The annual rate fell from 5.3% in April. Between April and May, prices were up 0.5%.

House values rose in all regions, with the east of England still growing at the highest annual rate, of 7.5%, followed by the east Midlands at 7.2%.

Analysts commented that “despite the election and consistent doom-mongering, we note that house prices continue to increase.”

The north-east registered the slowest annual growth, of 1.6%, followed by London at 3%. Prices in the capital are still more than twice as high as the UK average, at £481,345.

London Prime Property Overpriced compared with Rest of UK

The most expensive borough to live in was Kensington and Chelsea, in west London, where the average property cost £1.5m. At the other end of the scale, Burnley in Lancashire recorded an average house cost of just £78,000.

James Allen, head of alternative investments at financial services firm Walker Crips, said: “It is clear that prime London may as well be a different country.” He added that buyers in Kensington and Chelsea would need a deposit of £450,000, based on a mortgage at 70% loan to value.

“For a one-salary household, gross income would have to be £222,000. The number of people in the UK earning more than £200,000 is estimated to be 235,000 or 0.7%. When such a small proportion of the population can afford to live in a borough, demand must be coming from other quarters, namely foreign buyers.”

The ONS uses data from the Land Registry. Its annual house price growth has slowed since mid-2016 but remains faster than the 2-3% growth reported by major mortgage lenders Halifax and Nationwide in recent months. Analysts believe that a fresh slowdown is under way.

Samuel Tombs of consultancy Pantheon Macroeconomics is predicting that annual price growth will slow to 1.5% by the end of the year.

He argued: “Lenders are reporting that they will lend less in the third quarter and the recent pickup in wholesale funding costs suggests that they will not continue to cut mortgage rates. Meanwhile, the recent deterioration in consumer confidence, largely in response to the intensifying squeeze on real incomes, has made households less willing to make big ticket purchases.”

The Highs and Lows around the UK

Belper in Derbyshire, Hove in East Sussex, Todmorden in West Yorkshire, Woodbridge and Sudbury in Suffolk are the towns that have seen the fastest house price growth since January, between 6.6% and 7.4%, according to Zoopla. Bexley and Swanley in Kent, Langport in Somerset, Worcester Park in south-west London and Holyhead in Anglesey round out the top 10 property hotspots, with price growth of more than 6%.

However, values vary widely among the hotspots, from £152,840 in Todmorden to £492,850 in Worcester Park.

Richmond in North Yorkshire, Leatherhead and Walton-on-Thames in Surrey, and Altrincham in Manchester were identified as coldspots, with the biggest percentage falls in values – at around 5%. Pwllheli in Gwynedd, Weybridge in Surrey, Southwell in Nottinghamshire, Ellesmere Port in Cheshire, Burnley and Pontefract in West Yorkshire have also seen prices fall since January, by more than 4%.