Pete Wargent blogspot

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

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Friday, 20 November 2015

UK property surge

UK property update

There are a range of different indices and reports relating to UK property these days - and the latest indicate a property price increase in 2016, with some forecasters anticipating that prices will rise until 2020.

Firstly, Rightmove's Asking Prices Index, which is not seasonally adjusted, recorded its smallest November decline since 2011, which "sets the scene for higher prices in 2016", recording a year-on-year increase of +6.2 per cent (London +8.1 per cent, East of England +10.4 per cent, South East +7.2 per cent).

The latest Office for National Statistics index, widely considered to be the most reliable, showed the average UK house price rising to a new high, being up by +6.1 per cent over the year to September.

London prices increased to a new high of £531,000. 

Meanwhile the Hometrack 20 Capital Cities Index showed annual price gains moving up to +9.4 per cent and set to reach 10 per cent by year end. 

While there has been a recent acceleration from a low base in large regional cities such as Glasgow, Edinburgh, Liverpool and Manchester, as anticipated here the strongest gains since the 2007 peak have been seen in Cambridge (+44.7 per cent) and London (+44.4 per cent). 

Regional cities have lagged the capital city London (plus its Cambridge and Oxford satellites) by a wide margin. 

Many of these indices are backward-looking, but the latest mortgage approvals data have pointed the strongest mortgage demand since 2008, with volumes up by 19 per cent over the past year. 

With consumer price inflation nowhere to be seen and interest rates stuck at the effective zero lower bound further price gains are forecast.