The ONS released the new UK House Price Index (April) today, here are a few comments:
Rob Weaver, Director of Investments at property crowdfunding platform Property Partner, comments:
“On first viewing, the new single index looks like a fair representation of the market, sitting as it does between the ONS, Land Reg, Nationwide and Halifax indices – and consistent with current sentiment.
“But a word of caution – with transaction volumes at historic lows, the sample size for April will be smaller than normal.
“London has been the powerhouse, showing a 14.5% increase in the year to April. It’s an anomaly where the average house price in the most expensive borough in the UK – Kensington and Chelsea – is almost 18 times more than the cheapest borough Burnley in the north west of the country.
“Annual house prices in the capital have risen at more than double the rate of all other regions apart from the South East and the East. In fact, everywhere you look in England, prices have surged, except in the North East which is still playing catchup.
“It might still be two years away but the impact of Crossrail on house prices is there for all to see, with areas such as Slough on the west side of London, and Barking and Dagenham in the east, experiencing more than 20% annual price hikes.
“Uncertainty though has been the operative word over recent months, with the pending EU referendum keeping everyone guessing as to the direction of the market once the result is known.
“But with historically low interest rates, strong employment and the continuing chronic undersupply of housing, the upward trend in prices looks set to continue later in the year.”
Merger of the HPIs
“Hurrah for the government finally merging the two house price indices into a single official one. At least we should get a more accurate, reliable picture of the market, which will now include cash buyers and new build properties.
“It’s been confusing and inconsistent, with valuations varying massively due to different uses of source data.
“We’re hoping the new UK House Price Index will offer a more robust dataset, although the increased time lag (6 weeks) is a concern.”
Greg Tsuman, Director at Martyn Gerrard and ARLA London regional representative says:
“Today’s figures obviously reflect a surge as people rushed to beat the April increase in stamp duty when buying second homes. Next month’s figures will be more telling as to the true state of the market. Prices have come off the boil but are nowhere near collapsing – and in some areas like the City of London there has even been a huge spike.
We expect the next few months to show a decrease in transactions and reflect the slowdown in demand as Brexit-related uncertainty took hold, but I still don’t think we will see any major decrease in values.”
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