House Prices are Set to Grow by 7% This Year
Average UK house prices have remained strong in the first part of 2017 and look set to grow by up to 7% over the course of the year. The market has shrugged off the potential repercussions of Brexit and is performing better than was expected a few months ago.
The findings come from the latest Hometrack survey, who themselves predicted average rises of just 4% back in December 2016. What this shows is a sustained confidence in the sector, fuelled by an undersupply of homes and robust house price growth in large regional cities.
Hometrack are a property analytics service that examines the performance of 20 cities across the UK. They gather data from numerous sources and explore various trends relating to expected price. The latest June survey showed an annual growth rate of 5.1% to June 2017, with encouraging signs for the rest of 2017 and beyond.
The Research and Insight Director at Hometrack, Richard Donnell, has noted:
“… the headline rate of city house price inflation is holding up, despite the squeeze on real incomes and uncertainty around Brexit. The Brexit impact was greatest over the second half of 2016 but house price growth has picked up over the last six months. This is consistent with an 11% increase in the number of home purchase mortgages, which is also 5% higher than the five-year average.”
The expected growth was driven by the strong display of particular regions, notably those outside of the capital. Birmingham experienced the highest growth from a year ago (7.8%), with Edinburgh (6.5%) and Manchester (6.4%) also performing well.
House price growth in London declined by 2.6% – its lowest level for more than five years. Oxford, Bristol and Cambridge have also gone through a notable slowdown, whilst Aberdeen is the only city in the Hometrack survey to experience a decline from 12 months previous (-2.7%).
However, in the past 3 months alone, all but one of the 20 cities experienced positive growth. As Donnell pointed out, Brexit fears have been brushed aside and on current trends, 2017 growth is set to hit 6-7% on average.
In parts of the Midlands and the North-West, positive trends are expected to continue into 2018 as prices are rising from a lower base. Low interest rates and falling unemployment are further indications of this sustainability.
Here is some selected data from the June survey:
|City||Av. House Price||Yearly Rise|
The Hometrack report comes ahead of expected gains in UK property over the next five years. According to the Centre for Economics and Business Research (Cebr), house prices are set to jump by over £50,000 by 2021, accelerating especially from 2019 onwards.
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