The Land Registry house price index is the only industry source to provide house price data based on sales completions, providing the most concrete view of how the market is behaving. Because of this, it is released on a three-month lag but unlike the likes of Halifax and Nationwide who base their numbers of mortgage approvals, the Land Registry records every house sale made during the month to calculate the average UK house price.
The latest index shows that since July of last year, and despite an uncertain market post-Brexit, UK house prices have increased by 5.1%, the same level of annual growth seen in June.
Despite the market often seeing a slow down during the summer months, the average UK house price still increased by a notable 1.1% between June and July, demonstrating that the market wobble seen due to the Brexit vote and snap election is well and truly behind us.
This is great news for homeowners who can now be confident that their property’s value will remain intact and puts to bed predictions of another market crash. This upward growth is likely to maintain its course for the foreseeable future, largely due to the continued lack of housing supply and growing demand by UK buyers – with transactions up 8.3% on June, compared to just 1.3% this time last year.
First Time Buyers
Unfortunately for first time buyers, their average price paid has increased at a higher rate than existing properties at 1.3% during July, to 0.9%. Although annually they are still growing at a marginally lower rate (5.1% to 5.4%).
The East Midlands has enjoyed the highest annual price growth at 7.50%, followed by the East of England (7.10%), South West (7.00%) and West Midlands (6.90%). London has seen the lowest annual price growth of all UK regions at 2.80%, with Wales marginally higher than the capital at 3.10%.
However, month on month Wales has seen a drop of -0.30%, joined only by the South East with the largest fall of 0.40%. Despite a tough time over the last year, the North East has enjoyed the largest monthly growth rate at 3.30%.
This latest index provides the most compelling evidence yet that the UK property market has been able to shake off the woes of the previous year and snap election, to see positive growth during the summer months.
The rate of growth during this period is higher than previously reported by Halifax and Nationwide, which is impressive given that this price data usually lags slightly behind other industry sources that base their figures on mortgage approvals rather than sales completions.
A sustained level of growth can now be expected and it is unlikely that any further developments in the Brexit process should dampen this. Although the market has taken a wobble, UK homeowners should rest assured that the worst is now behind them and we won’t be seeing a repeat of the 2007 crash.Russell Quirk