The price growth of new builds has rapidly outstripped the price of existing resold property, according to the latest House Price Index. The average price of a new build property in UK now stands at £312,561, compared to £212,337 for an existing property. This represents a monthly increase of 12.9%, and an annual increase of 27.6%.
Meanwhile, the average price of an existing property slipped 0.1% on a monthly basis and 4.8% on an annual basis. However, the initial estimate for new builds is based on a small sample which can cause volatility.
Housing market indicators for January suggested moderate demand which continues to outmatch supply. UK House prices grew by 6.2% in the year to January 2017, 0.5 percentage points higher than December 2016. However, this still remains below the average annual house price growth seen in 2016 which was 7.4%.
The Royal Institute of Chartered Surveyors’ (RICS) residential market survey for January 2017 reported little change in transaction volumes and new buyer enquiries between January 2017 and December 2016.
On the supply side, RICS reported an 11th consecutive month with no improvement in national listings of houses. London was reported as the only area where near term prices expectations are negative, whilst in all other UK regions price expectations are positive.
ONS Construction output in December 2016 reported total new housing was 6.7% higher than in December 2015. For the 13 months from December 2015 to December 2016 the 12 month growth rate of total new housing has been positive however this does not appear to have alleviated housing demand outstripping supply.
The Bank of England approvals for lending secured on dwellings for January 2017 showed that the volume of approvals for house purchase decreased by 3.9% compared to January 2016. However, the total volume of approvals for lending secured on dwellings, which includes remortgaging and other purposes, increased by 3.2% from January 2016 to January 2017.
The Bank of England’s Agent’s summary for February 2017 reported that housing market activity had been sluggish overall, and was expected to remain so over the coming year.
In England, the January data shows an annual price increase of 6.5% which takes the average property value to £234,794. Monthly house prices have risen by 0.7% since December 2016.
Wales shows an annual price increase of 4.2% which takes the average property value to £145,933. Monthly house prices have fallen by 0.6% since December 2016.
London shows an annual price increase of 7.3% which takes the average property value to £490,718. Monthly house prices have risen by 3% since December 2016.
The regional data indicates that:
- East of England experienced the greatest increase in its average property price over the last 12 months with a movement of 9.4%;
- London experienced the greatest monthly price growth with an increase of 3%;
- North East saw the lowest annual price growth with an increase of 2.2%;
- Yorkshire and the Humber saw the most significant monthly price fall with a movement of -2.6%.