The industry reacts to the latest Land Registry HPI
Following a strong increase in sales in March, the most up-to-date Land Registry figures for April 2016 show that UK home sales fell by 55.4%, recovering slightly in May and June 2016.
The latest Land Registry House Price Index for June 2016 also shows:
- the number of completed house sales in England fell by 33.4% to 42,938 compared with 64,467 in April 2015
- the number of completed house sales in Wales fell by 26% to 2,394 compared with 3,237 in April 2015
- the number of completed house sales in London fell by 49.7% to 4,368 compared with 8,678 in April 2015
- there were 169 repossession sales in England in April 2016
- there were 20 repossession sales in Wales in April 2016
- the lowest number of repossession sales in England and Wales in April 2016 was in London
Andrew Bridges, Managing Director of Stirling Ackroyd, comments: “One thing is clear from today’s figures for June – despite a month of swelling uncertainty for the entire property market – hefty house prices are here to stay.
“London is seeing unfaltering demand for homes, and overseas buyers are playing a crucial part in sustaining this momentum. Amid all the doubt and predictions in the last couple of months, London’s property market is still on a long-term upward trend, and prices are 12.6% higher than at the same time last year. The popularity of the capital leads to a premium buyers are ready to pay to secure a home – and a lack of new homes is pushing up prices even further. We may see the London market take a breath over the next few months, but make no mistake the trajectory is very much upwards unless tens of thousands more new homes can be built each year.
“There’s now a £348,000 difference between the average home in London and in the North East – if London gets building this can begin to narrow. It’s buyers at the lower end of the market struggling the most, and as the real ripples of Brexit hit the surface over the next couple of months it’s these buyers who could be further priced out.”
Richard Connolly, Chief Executive Officer at Rentplus, comments:
“This latest data on the property market shows the continued house price growth across the UK in June 2016, with all regions seeing an annual increase in property prices. The monthly growth in prices across the nation was equal to £2,100 – near enough the equivalent of a month’s average salary. This is fantastic news for those who own their home already, who are seeing it work hard for them in terms of equity gain, but for the many people who are saving to get on the property ladder it is another indicator of lack of affordability and the continuation of the housing crisis. The ability to put up a deposit remains the biggest barrier to home ownership and, with real wages in the UK falling and low interest rates working against savvy savers, first-time buyers will find it increasingly difficult over the coming years to make the savings necessary to own their own home.
“The new prime minister has pledged to tackle the housing crisis and we desperately need those promised 250,000 homes per year to be built. However, a one size fits all approach to the types of housing available won’t work and the government needs to accommodate innovative new housing models which increase access to home ownership and at the same time offer people security of tenure.
“The strength of today’s house price data will increase the confidence of the residential construction industry in this post-Brexit period, but more needs to be done to escalate the scale of delivery to meet the challenges of affordability and a growing population. New market entrants which bring private institutional investment to the affordable housing sector now ought to be considered as a key part of the solution to the housing crisis, boosting the number of homes available for aspirant home owners.”
Andy Knee, Chief Executive of LMS, comments:
“There was little sign of a pre-referendum house price lull in June, despite ongoing speculation about the impact of political uncertainty on the market. The average house price rose 8.7% in the year to June 2016, up from 8.5% in May. The £17,000 increase in the average house price puts savings returns to shame in the current low interest rate environment, and leaves many homeowners with significantly more equity at their disposal than a year ago.
“London and South East England continue to have the highest average house prices [£427,000 and £309,000 respectively], but hopeful buyers towards the lower end of the market will be pleased to see London house price inflation slowing [0.2% in June vs. 1.5% in May]. Although the longer-term impact of the vote to leave the EU on house prices remains to be seen, we expect consumer demand to remain high. Appetite for housing continues to outweigh supply, following a modest 1.8% increase in new-build housing output for the second quarter of 2016*, and only by tackling this will buyers see a respite in the cost of housing.
“Looking ahead, the recent base rate cut to 0.25% will be a major factor in the second half performance of the housing market in 2016, as well as the wider economy. Savers might be forgiven for thinking the outlook can hardly get much worse, but it is likely to mean a prolonged season of discounted mortgage pricing which will provide extra incentive to aspiring homebuyers and remortgagers.”