UK house price growth appeared to remain stable throughout 2016. According to Zoopla, house prices grew much faster in eastern England and also the West Midlands. However, it has been reported that house prices in London fell by 8.7% (according to Rightmove) over the past year and it was below the UK’s average for the first time since 2008. Despite the drop in buying activity in London, the average price for a house still remains more than double the UK average, according to the official statistics from the Office for National Statistics.
It has been noted that most forecasters, including the Bank of England, expect the UK economy to slow modestly this year and this may result in slower house price growth. Nationwide has said that it expects house price growth will slow down to around 2% in 2017 (compared to an average rise of 10% in 2016) due to the expected weakened economy.
The low interest rates that are currently on offer are expected to help support demand of property, but a shortage of homes on the market is expected to provide support for house prices throughout the country; so the slower growth may also depend on other factors.
It would appear that house prices may crucially depend on developments that occur in the wider economy, mainly due to a greater degree of uncertainty that surrounds the economy at this current time. The early months of 2017 could determine what happens to house prices in 2017 as it should hopefully become clear whether low mortgage rates and the lack of new and existing supply of houses proves more significant, rather than uncertainty over the wider economy post-Brexit.
For those who have access to cash or can secure a low interest mortgage, 2017 may well be a good year to get on or move up the property ladder.
If you have any queries, please contact our Property team on 0161 832 3304.