Central England 'defying property price slowdown'

Despite slow growth in London, parts of central England are seeing strong growth in property prices. Northamptonshire is leading the way with annual asking price increases of over 9 per cent.

Central England 'defying property price slowdown'
Parts of central England are seeing a surge in house prices at a time of sluggish growth across the rest of the country.

Northamptonshire becoming a property hotspot

The latest index from property website Rightmove shows that Northamptonshire is leading the way nationally with asking prices currently increasing at an annual rate of 9.1 per cent, compared to a national average of 3.1 per cent.Derbyshire, Norfolk, Leicestershire, Worcestershire, Nottinghamshire, the West Midlands and Bedfordshire are also currently recording asking prices growing at more than twice the national average.Miles Shipside, a Rightmove director, said, “With newly-marketed property seeing a monthly fall (in August) of 0.9 per cent and a muted yearly rise of just 3.1 per cent, the heat has come off much of the market.“A combination of traditional summertime price blues and the chill of uncertainty in the air has cooled price growth in some parts of the country, and affordability also remains very stretched.“But despite these factors, high demand and limited supply are still driving momentum, especially in the counties in the middle of the country.“Here, year-on-year rises at more than twice the pace of the national average are widespread, in contrast to southern and northern counties where none have approached these heady heights.”

Report forecasts house price growth will slow to a third of 2016 rate

In a separate report on Monday, estate agency and letting network Countrywide forecast house price growth this year would slow to a third of 2016 rate but would start to pick up again next year and in 2019.Countrywide estimated this year's rise at 1.5 per cent, compared to the five per cent recorded last year. It predicted two per cent growth next year and three per cent in 2019.In London and NE England prices for the rest of 2017 are predicted to be flat, with central London expected to dip 1.5 per cent before picking up next year. Prime properties in Central London are forecast to rise two per cent this year and between four and five per cent over the coming two years.For the rest of this year, the East of England is expected to buck the national trend with a 3.5 per cent annual rise.

Economic conditions remain challenging 

Fionnuala Earley, Countrywide's chief economist, said, “Economic conditions for households will remain challenging over the next year as inflation eats into budgets and interest rates begin to rise.“In addition, fewer landlord purchasers and the later age at which people buy, is affecting the level of demand. But we expect the UK economy to recover and wage growth to pick up in response to global growth. That, combined with a continued lack of housing supply, will help to support house prices.“The housing market is sensitive to confidence which will be affected by the outcome of Brexit negotiations and the implications this will have - particularly on employment.”

Average price increase for a home: £85,000 in five years

Meanwhile, an analysis from Lloyds Bank published on Monday showed that the average price paid for a home over the past five years had increased by an average of almost £85,000 - from £206,122 in June 2012 to £290,991 in June 2017, an increase of 41 per cent. In London, the average rose by 56 per cent over the same period, from £359,679 to £561,032.The report also showed that, in the first six months of this year, 171,300 Britons moved home compared to 174,300 in the first half of 2016.
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Andrew Mason, Lloyds Bank mortgage products director, said, “In the past year, the number of home movers appears to have stabilised despite continuing low interest rates and rising employment.“There are a number of factors which could be influencing this, more people are paying off their mortgages and not moving, with supply at historic low levels there could be a shortage of suitable homes coming on the market and the cost of moving house could be putting people off.“This has meant that home movers now account for just half of today's housing market compared to a decade ago when it accounted for two-thirds of the market. This has a knock-on affect for first-time buyers as there will be fewer properties available for them also.”

Countrywide's forecasts for regional annual house price growth in 2017, 2018 and 2019:

  • North east, 0%, 1%, 2.5%
  • North west, 2.5%, 2%, 3%
  • Yorkshire and the Humber, 2%, 1.5%, 2.5%
  • East Midlands, 2.5%, 2%, 3%
  • West Midlands, 2.5%, 2%, 3%
  • East, 3.5%, 2%, 3%
  • South east, 1.5%, 2.5%, 4%
  • South west, 1.5%, 2%, 3%
  • Wales, 0.5%, 2%, 2%
  • Scotland, 0.5%, 2%, 3%
  • London, 0%, 2.5%, 4%
  • Prime central London, 2%, 4%, 5%
  • Central London, minus 1.5%, 2%, 4%
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