Despite a general feeling in the public that the housing market might be slowing down the Office for National Statistics has just released it’s latest data. According to them we are seeing the inflation of house prices being at its highest level since October 2016.
The average house price is currently £220,100, which is £12,000 up on the this time last year. In percentage terms thats a 5.7% jump in the year up to April ’17.
The ONS has also revealed that it’s Dartford in Kent that’s seeing the highest rises with the last 12 months showing an increase in over 13%. The average price of a home here is £306,405.
Continued house price increases “reflects the growing chasm between house price inflation and affordability”, according to Jeremy Duncombe. He went on to suggest that it will be first time buyers that are hit the hardest and more and more they are turning to their parents to help with deposits, or face losing the chance of owning a home.
During the recent election campaigns and a general rumbling over the last few years, the main reason for the continuing price increases is basic supply and demand. The demand for houses far outstrips demand and as long as that’s the case we are generally going to see rises.
PWC economist, Richard Snook, said it “goes against the general pattern of slowing growth”. They have predicted a 2017 increase of 2-5% overall.
Where saw the largest increase?
It’s a small market with relatively few sales, but Orkney saw an enormous leap in prices of 24.1%, meaning the average is now at £151,543.
The area with the biggest drop was Na h-Eileanan Siar, which saw 15.3% being knocked off values.
The Council of Mortgage Lenders said their data tells us that borrowing was up on this time last year but down on March. The borrowing was at £9.6bn which is down 14% on March but up a substantial 19% on last April.
There have been some issues that have hit the market, such as Brexit and changes in Stamp Duty calculations. Taking this into account, along with the usual seasonal jumps, lending is “relatively unchanged”.
SPF Private Clients has said that “demand from landlords remains muted as investors get to grips with tax changes and higher stamp duty.”
They say there is an over supply of money so first time buyers that can get their deposits and those that are remortgaging are “making hay while the sun shines”.
The bridging and development market remains very competitive too. With a market full of lenders and money there is fierce competition for business.
It’s not all about rates, of course, as we are at great pains to say regularly. Particularly when it comes to development finance it’s vital that a borrow considers the level of service they will receive and how experienced the lender is in handling the complexity and issues that face projects and clients.
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