UK house price growth is on the up

11th April 2017

According to a report on the UK’s property market by the Office for National Statistics (ONS), house price growth picked up in February, as prices rose by 5.8% in the year to February, up from 5.3% in January.

This will be great news for investors and homeowners, however there seems to be some disparity between this and several other housing reports. In particular, recent figures from Nationwide and Halifax have pointed to a slow-down in the growth of the housing market.

Whereas, at the same time, the Council of Mortgage Lenders (CML) reported very strong borrowing in January and February. The CML said borrowing in January and February was the strongest for 10 years, since the financial crash in 2007.

In all, 93,200 loans were taken out in the first two months of the year, the highest number since the financial crisis.

“Seasonal factors traditionally keep the market quieter in winter months, but 2017 began relatively strong on the house purchase side,” said Paul Smee, the CML’s director general.

“Borrowers took out more loans to purchase a home in the first two months of 2017 than any year since 2007.”

That number was driven by an increase in the number of first-time buyers. However, the number of existing homeowners needing a new mortgage to move house has fallen.

The ONS figures – which include cash sales – show that the average price of a property has risen to a record high of £217,502.

According to the Nationwide, average prices fell during the month of March. And last week the Halifax said annual house price inflation was at its lowest for four years.

With Brexit and the triggering of Article 50, anything could happen but we are unlikely to see any major knee-jerk reactions within the property market. The unprecedented months ahead will entail a “wait and see” approach for many as we see what happens. No-one can truly predict what is to come, merely speculate at what will happen to the cost and growth of property in the weeks to come.

Tony Freeman
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