Two of Britain’s leading mortgage lenders, the Halifax and the Nationwide Building Society, have recently released figures which show that the price of property in the UK has risen to the point where the average house price is around £200,000.
According to the Halifax, the £200,000 barrier has been broken; the Nationwide reckons the average price is just below that sum. But the message which the overall trend suggests is that whether it is as a residence or for letting, property is a sound investment in the UK.
The two lenders actually disagree on the way in which the market moved in June. The Halifax maintains that there was a 1.7% rise in June compared to May; whilst based on the experience of their borrowers, the Nationwide say that there was a fall of 0.2% in June compared to the previous month. Even so, the Nationwide acknowledges that even their lower figure for June was still 3.3% higher than in June 2014, which came after a very strong start to the year.
But it is pointless to spend too much time picking over the differences in the two reports. The clear message is that whatever the greater or lesser percentage points, house prices in the UK continue to climb steadily.
And there is little sign that that is about to change. The UK currently has the strongest economy in Europe; high employment; real earnings are on the increase; mortgage rates are low; and estate agents are reporting a significant shortage of available property. As one estate agent recently told this blog, “At this time of year we would expect to have 50 affordable properties on our books; we currently have five.”
The victory for the Conservative Party in the General Election was generally viewed as positive for the property market, too, not least because at the higher end it removed the threat of the so-called “mansion tax”, which the Labour Party, had it been elected, had promised to introduce on properties valued at £2m or higher.
As might be expected, housing prices in London not only remain the highest in the UK, but continue to be among the fastest growing. You can play around with statistics and show that the highest annual price growth over the past 12 months was actually in Northern Ireland; but that’s because they were starting from a low base.
The average house price in Northern Ireland is just over £125,000, an increase of 8% over the past 12 months. But even though the average increase in London was lower, at 7.3%, that still leaves the average house price in the capital at £430,000, and in the area around London at £315,000.
It might be a bitter pill for youngsters who are trying to get on the housing ladder in London, but the fact is, firstly, that property in the UK generally keeps its price; and that property in the capital not only keeps its price but that price continues to rise.
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