The latest and last house price index for 2017 from the Land Registry, shows that the market finished the year on a high despite the usual seasonal lull, with an increase of 0.4% in December and an annual increase of 5.2% for the year.
While prices are on the up, the Royal Institute for Chartered Surveyors reported that new buyer enquiries had continued to fall with -15% of respondents noting a decline in interest compared to -5% the previous month.
This is always the case in December as we head towards Christmas but an overall air of market uncertainty has also contributed to the wider slower market conditions seen over the last year. The RICS also reported that the net balance for new instructions remained negative for the 24th consecutive month and although stock levels have remained broadly stable, they remain close to historic lows.
As a result, the number of residential transactions fell by 0.1% annually and by 3.9% between November and December, with the market following the same trend as last year.
But despite many on both sides of the buyer/seller fence adopting the ‘wait and see approach’ and causing both supply and demand levels to fall, there is still a larger appetite for homeownership than there are homes to satisfy it.
Another marginal drop in buyer enquiries, coupled with a continued shortage of new properties coming onto the market, has seen transaction levels continue to dwindle. However, it highlights the severe shortage of stock to satisfy even the most paltry of buyer interest, as prices remain stimulated by the imbalance of supply and demand levels in the market.Russell Quirk
This is great news for those looking to sell in the New Year as the market picks back up, as not only are you able to secure a higher asking price compared to the last year, but the lower level of stock coming onto the market suggests an easier task in finding a buyer. So while enquiries may have fallen at the back end of last year this is largely due to seasonality and, as we approach the busiest time of the year for the UK market, pricing your property appropriately should see you secure a smooth sale in no time.
So where has bucked the trend of 2017 to see the best price growth?
Scotland leads the UK with an annual increase of 7.70% in property values over 2017, closely followed by the South West (7.50%) as the best performing region in England. The East and West Midlands are fittingly joint third at 6.30% and the North West has also enjoyed strong annual growth (5.90%).
The Top 20 UK Areas for Double-Digit Price Growth
Not only is the vast and varied makeup of the UK market shown within the regional rankings, but it is also apparent on a more granular level. Across the UK there are a total of 20 places to have seen house price growth hit 10% or higher.
The Orkney Islands in Scotland is the top of the pile with a huge increase of 18.18% in 2017, closely followed by Cambridge (15.70%) where homeowners have enjoyed strong growth despite it being home to an average house price of £462,033.
Eden in Cornwall (15.05%), West Dunbartonshire (14.95%) and Kettering (14.05%) also enjoyed some of the strongest growth across the UK.
There are a wealth of areas that have enjoyed double-digit growth, with the Orkney Islands not only leading the UK but Scotland as the region with highest annual price growth.
The diversity of the fabric that constructs our overall market is clear to see, with areas across the nation from Eden to Edinburgh, West Dunbartonshire to West Dorset, Manchester to Chichester and much more all enjoying double-digit price growth over the last year. It highlights that although the market maybe struggling in specific areas or at certain price brackets, this is not the case everywhere and some are seeing very healthy levels of market activity.Russell Quirk
The capital has been worst hit of all UK regions where market uncertainty and a decline in price growth is concerned. At just 2.50%, it has seen the lowest rate of price growth of all regions but remains the most expensive with an average house price of £484,173.
But as with the rest of the UK, not all homeowners have seen the price of their property decline. London’s cooling market has largely been driven by its most prestigious boroughs, with Kensington and Chelsea seeing prices fall by -10.68%.
But only seven boroughs have seen a decrease and London’s peripheral and slightly more affordable boroughs have continued to see prices climb. Merton (9.78%), Tower Hamlets (9.42%), Greenwich (7.32%), Bromley (5.71%), Redbridge (5.69%) and Barnet (5.35%) have all seen annual price growth exceed 5%, with a further nine seeing above average price growth over 2017.
While London continues to see annual house prices growth slump overall, there are signs of a slow market recovery with just seven boroughs registering negative annual price growth in what has been a very tough year for the capital.
The London market is as diverse as the UK and while the city’s more prestigious boroughs have seen buyer activity drop off the map, its affordable and peripheral boroughs have defied wider market conditions to enjoy a far more positive end to the year.Russell Quirk