Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Wednesday, 23 December 2015

Merry Xmas 2015

Xmas time

An early Merry Xmas from the Old Dart, where preparations for the usual festivities are well underway.

While on the subject of British news, Hometrack released its final 20 Cities Index for the year.

It's been an interesting year for the UK. The FTSE hasn't done a great deal of note, weighed down by the oil and resources stocks, but employment and the employment rate are at record highs, and unemployment keeps falling

2015 was another year where commentators predicted a property market correction for London, but on the back of a 4.1 per cent surge in the last quarter, London prices are up by 13.3 per cent year-on-year to once again top the table.

This represents another increase o£52,900, and follows very strong gains of 14.7 per cent in 2014.

London prices are now 45 per cent above their 2007 peak and up 74 per cent from their trough. 

The capital city therefore just nudges out Cambridge as the top performer, where prices are up by 72 per cent from their trough to be 44 per cent above their 2007 peak.

On the other hand, most regional cities have done next to nothing since 2007 despite periods of high inflation, and several remain below their respective 2007 peaks, most notably Belfast in Northern Ireland.

Interestingly the oil price shock has seen slick house price growth in Aberdeen quickly turned to sludge, with prices now down over the year. 

Overall city house price growth came in at 10.1 per cent growth in 2015, despite lower sales volumes.

Debt servicing costs continue to fall leaving affordability broadly unchanged, with the average rate payable on outstanding mortgage debt now just 3.1 per cent. 

City prices are forecasts to rise by 7 per cent in 2016 in spite of a likely slowdown in investor activity, with the ongoing dearth of available stock expected to be a key driver.

Read Hometrack's insights here