As we report on the continual rise in house prices, there have been certain trends in the property market that pinpoints specific areas of the UK where prices have shot up at an exponential rate. London has seen the worst of it, with rises on the up ever since the recession hit eight years ago. However, in a recent article produced by the Evening Standard, there has been an apparent decrease in the rate of house prices increasing in the capital, with other areas of Britain reporting a dramatic increase, such as the East and South-East of England.
Even though new figures released from the ONS (Office for National Statistics) show that the average cost of the purchase of a property in the capital has climbed up to 12.1% in the last year, or in other words, from a price tag of £53,000 to £489,000. In more reports, ONS has recorded that overall, there has been an above average growth of 8.1% over the last 12 months. The figures represent the 19th consecutive month of house price increases across the UK, with the last monthly price drop recorded last year, in January 2015. But it is still early days in terms of counting the cost from the referendum result in June and the changes in the stamp duty that was announced in April of this year, which have been affecting the rate of increase of the house prices in Britain, leading to a deeper crisis. One spokesman from PwC, economist Thomas Fisher, stated: ”We project that average UK house price growth for 2016 will be over five per cent, but will cool to around one per cent in 2017 in response to slower expected economic growth next year.”
The article goes on to highlight that the fastest-rising region in the UK is the East of England, with areas such as Hertfordshire and Norfolk, with reports of over a 13% increase, followed by places in the South-East including Berkshire and the Isle of Wight boasting an increase above 12%. The capital saw growth of 12.1%, meaning growth has slowed for the usually burgeoning city. Paul Smith of Haart Estate Agents reckons that this pattern is due to buy-to-let landlords and overseas investors venturing out of the capital in favour of regions that they see as having more lucrative returns on their investments. He foretells, however, that ”the continued lack of supply will always hold the market up in the resilient capital, and this is unlikely to see a too damaging effect on growth.”
As house prices continue to rise from varying consequences of governmental policies and regulations, this will have a knock on effect on the economy, as Brexit has had on the pound. The pound is still struggling to bounce back, and in a similar vein that is the story with the housing situation in Britain. The jury, it seems, is still out on the future of the UK’s housing situation.