A new official house price index has shown that property prices in the UK rose by 8.2% in the year to April, and have increased by 0.6% since March 2016.
The new UK House Price Index (UK HPI) replaces indices published by the Land Registry and the Office for National Statistics (ONS) and reflects the transaction price for sales of residential property in the UK.
It’s figures, published today, puts the value of the average property in the UK at £209,054. However, this is £80,000 less than the £292,00, estimated in the ONS’s previous data for March 2016.
Meanwhile in England, house prices went up, on average, by 9.1%, with the average house price standing at £224,731.
In Wales, the annual rise in house prices was much more muted – at 1.7% – with the average property value at £139,385.
The new UK HPI also reveals that London property prices are steaming ahead of the rest of the UK, with prices rising by 14.5% over the year, and the average property costing £470,025.
Other regions that performed well were the East of England, where prices went up by 13.6% over the year (average price £263,420), and the South East, where prices rose by 12.3% (average price £301,689).
For the first time, the index includes the financing status of buyers in Great Britain (not Northern Ireland), looking at whether they paid cash or by taking out a mortgage. It found that cash buyers paid, on average, £198,492 for their property, compared with £218,490 paid by those taking out a mortgage – suggesting that cash buyers can benefit from discounted prices.
Another welcome addition is the inclusion of data for Great Britain on whether transactions were completed by first-time buyers or former owner-occupiers. First-time buyers paid, on average, £176,773 to get on the property ladder, compared with £242,109 paid by former owner-occupiers. The number of first-time buyers who bought in April was up by 0.9% over the month, compared with 0.4% for former owner-occupiers.
Housing market ‘appears reasonably strong’
Interestingly, the index also now includes data for sales of new-build and existing resold property. Month on month, sales of new-builds went up by 4.6%, compared to 0.3% for existing resold property. Over the year, the number of new-build transactions went up by 10.2%, compared with 8% for existing properties. When it comes to average property prices, new-build homes in April averaged at £254,604, compared with £204,914 for existing properties.
Jeremy Leaf, a former RICS chairman and north London estate agent, comments: “The split between new-build and older property is interesting, particularly as prices of the former are going up faster, which may reflect a shortage of supply.”
However, he adds: “The two main drawbacks of this index are its historic nature and its immaturity. There are no robust statistics with which to make a comparison so it is difficult to compare like for like. However, going forward the figures will be particularly interesting after the EU vote one way or another, and as the index starts to mature.”
Richard Snook, senior economist, PwC, says: “The recent trend in house price growth is little changed as the new figures continue to show a surge in house prices in March, as buyers rushed to beat the introduction of the new 3% supplementary stamp duty charge on additional properties. Year-on-year growth in prices then dipped slightly to 8.2% in April from 8.5% in March.
“Overall, the housing market still appears reasonably strong as we move into the summer, with little sign yet of a drag from uncertainty around the EU referendum outcome.”