The North-South housing divide continues to narrow, according to the latest data from the Office for National Statistics (ONS), which revealed that house price growth has been fastest in the North West of England over the past year, while London again recorded the slowest annual rise.
Property prices have sped up in cities such as Manchester but the UK average has remained steady. House prices rose by 7.3% in the year to the end of September in the North West of England, while the UK average was a 5.4% rise over the same period. In London however, the annual rise was just 2.5%.
The average UK house price was £226,000 in September 2017, some £11,000 higher than a year earlier and up 0.4% on a month earlier. The figures were published as the ONS also revealed that general consumer prices, as measured by the CPI measure of inflation, rose by 3% in the year to October 2017. Meanwhile, private rental prices paid by tenants in Great Britain rose by 1.5% in the 12 months to October, the ONS said, slightly down from 1.6% in September.
However, the figures also showed sales volumes were at their lowest in five years in July, with transactions dropping 15.2% compared with the year before. Compared with the previous month the number of property transactions completed in the UK in July decreased by 8.6%.
The biggest drop was in England where sales fell 17.1% to 64,592, while Northern Ireland was down 8.6% to 5,453. Activity in Wales declined 11.3% to 3,599 and in Scotland sale volumes fell 5.7% to 8,725.
Unsurprisingly, the drop was most pronounced in London, with sales falling by 32% annually in July to 6,639, while the east of England saw a 20% drop to 7,636. The smallest fall among English regions was in the Yorkshire & Humberside region, down 11% to 6,624.
Market comment
“The market has continued to splutter along, registering yet more marginal positive price growth despite a sustainably lower level of buyer demand,” said Russell Quirk, chief executive at Emoov.
He added: “This is certainly promising for those on the ladder and we should see a large degree of stability return with a heightened level of buyer interest come January. It is yet to be seen what, if any, impact the marginal increase in interest rates will have. It is likely that while many will sit back and see through the Christmas period as a result, there will be no medium to long-term impact on the UK’s appetite to buy property, with the cost of borrowing still very affordable for the masses.”
“The market has continued to splutter along, registering yet more marginal positive price growth despite a sustainably lower level of buyer demand,” said Russell Quirk, chief executive at Emoov.
He added: “This is certainly promising for those on the ladder and we should see a large degree of stability return with a heightened level of buyer interest come January. It is yet to be seen what, if any, impact the marginal increase in interest rates will have. It is likely that while many will sit back and see through the Christmas period as a result, there will be no medium to long-term impact on the UK’s appetite to buy property, with the cost of borrowing still very affordable for the masses.”
Graham Davidson, managing director at Sequre Property Investment, commented: “With house prices still rising steadily, we can see the market remains in a promising position as we near the end of 2017. An annual increase of 5.4% is generally the level of growth we have predicted we would see at this point in the year. Whilst the overall growth is of importance, areas such as the North West, which we have been championing for several years now, are far surpassing other parts of the UK with a huge 7.3% growth to September this year. London continues to take a dip with growth of just 2.5% which we also predicted at the beginning of the year.
“For buy to let investors, the message could not be clearer. If you want high yields and capital growth, the north is best to invest. The supply and demand imbalance across the country is showing little sign of being corrected, so the demand for high quality rental accommodation will remain. With cities like Manchester tipped for a 28% price growth and Liverpool expected to see a 23% increase, key northern cities should be on every investor’s radar. This latest report in addition to the BoE recently raising rates, are all signs of a strengthening economy.”
Ged McPartlin, director at Ascend Properties, said: “An annual increase of 7.3% for the North West highlights an incredibly strong property market. While we’re aware of a number of factors that contribute to these rises, such as supply and demand and the chronic lack of housing stock, this has not lead to any slowdown from buyers keen to jump on or move up the property ladder. The property market continues to be in full swing, even at a time when the market generally starts winding down towards the end of the year; demonstrating the level of demand we’re seeing in areas like Manchester and Liverpool. Whilst rising prices are difficult for aspiring homeowners to take as a positive, it’s great news for those already on the ladder or for investors seeking capital growth.”
