House price inflation gathering pace in pre-referendum period

Annual house price growth nudged up from 8.5% to 8.7% in the final build-up to the EU referendum, with the east of England leading the way, data from the Office for National Statistics and Land Registry have revealed.

The June house price index showed the average UK house price was £213,927, up 1% on May, but of course the landscape has changed dramatically since the end of June and the Brexit vote.

The east of England overtook London with house prices increasing 14% in the year to June 2016 to £270,000, compared with 12.6% growth in the capital to £472,000.

The lowest annual growth was in the north-east where prices increased by 1.5% over the year to £124,000.

Prices for first-time buyers increased by 0.7% to £180,667 while those moving saw prices go up 1.2% to £247,736.

The gap between cash buyers and mortgage borrowers appears to be closing, the index shows.

Cash buyers paid 8.2% more on average year-on-year in June at £203,639 while mortgage borrowers saw prices go up 9% over the same period to £223,126.

In comparison, during May, average prices stood at £200,699 for cash buyers and £220,765 for those with a mortgage.

The data from the new official house price index is out of date in comparison with other indices such as Nationwide’s, which reported monthly house price growth up 0.5% £205,715 during July, and Halifax which recorded a 1% dip to  £214,678.

Jonathan Hopper, managing director of the buying agents Garrington Property Finders, described the ONS/Land Registry data as an “historic anomaly.”

He said: “The monthly totals lump together two very different property markets, pre- and post-referendum.

“The market was sluggish in the final weeks before the Brexit vote. In the days after it, it was punch drunk.

“The pre-referendum market portrayed by this anachronistic data – in which steady price rises were underpinned by strong demand and limited supply – is gone.

“The vote for Brexit plunged the market into a ‘hard reset’ in which both buyers and sellers took a step back and considered their positions.

“With demand and supply softening simultaneously, the market has entered unknown territory. There’s intent but precious little clarity.”

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One Comment

  1. Property Paddy

    I’m still selling BTL quite actively up to £250K  buyers with cash are still getting a better deal up to this price point with the 3% surcharge than leaving the money in the bank.

    It seems leaving money in the bank could be more expensive than under your mattress

    Don’t suppose you get much in North London for £250K but outside the London bubble there are good deals to be had.

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