19th January 2016
UK house price growth accelerated in the year to November rising to 7.7%, official figures show.
In the year to October, prices increased by 7%, according to according to the Office for National Statistics (ONS).
The average property price reached a new record of £288,000 it found.
The steepest price increases were in the East of England where annual growth was 10.2%, followed by London and the South East with rises of 9.8%.
Scotland and the North East of England saw the slowest growth, at just 0.4%.
Jonathan Hopper, managing director of the buying agents Garrington Property Partners, says: “Such strong house price rises traditionally trigger equal cheer among homeowners and gloom among first-time buyers.
“But this week has revealed a notable silver lining for those chasing their first home. Data from both Rightmove and the ONS shows that first-time buyer prices are rising more slowly than the rest of the market.
“This is likely to be driven by two things – both of which may have long-term benefits for the market.
“Demand may be softening as would-be buyers reassess and decide to save longer to secure the home they want. But more importantly, the easing of first-time buyer price rises could be the first sign of greater supply coming onto the market.
“The Help to Buy scheme has long been accused of stoking prices but not supply… but its ultimate goal was also to get Britain building more. If the slew of starter homebuilding is beginning to bite, this bodes well for supply in 2016.
“With 2015’s price rises driven largely by chronic undersupply, any signs that new homebuilding is now impacting the market could prove decisive this year.
“The East of England’s double-digit price rises continue to outstrip those in both London and the South East. Much has been made of soaring demand in uber-hotspots such as Cambridge, but East Anglia’s price growth is part of a longer trend – as those who are priced out of London look beyond the usual Home Counties suspects for greater value just north of the capital.”
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), adds: “House prices in November saw the biggest annual increase in eight months, despite traditionally being a quieter time in the housing market. Those lucky enough to already be on the property ladder are the clear winners of this boom, as homeowners trading up to the next rung take advantage of improving property values. Increased equity means even those not looking to sell can benefit by switching to a more affordable mortgage deal.
“The heat is set to rise in the buy-to-let and second home market in the short-term, as buyers rush to complete before the changes to Stamp Duty kick in in April. In the long-term, the dearth of properties available combined with rampant demand means house price growth isn’t likely to slow any time soon. This creates clear affordability concerns for first-time buyers.
“Government schemes to increase affordable housing will put a bandage over the wound: but without a significant and sustained increase in the construction of new homes, the current housing crisis isn’t likely to be cured any time soon.”