Despite slow buying activity, the UK’s house prices are still on the rise according to the most recent index of asking prices. The continued growth of property values is believed to be fuelled primarily by a lack of supply and the availability of low-cost mortgage deals.
Overall, average property prices in June are up by 6.7% compared to June of 2015, according to data from home.co.uk. Regional prices rose month-on-month in June across all areas of the UK except for Greater London and Wales. Overall, the nation’s average property asking price for June is up 0.4% compared to the previous month.
The region with the fastest-growing prices was the East of England. Prices in this region have grown significantly in recent months, with a 1.6% month-on-month rise in June and a 2% rise the month before. Year-on-year, June saw East of England asking prices show overall growth of 13.9%, with the average property in the region now being advertised with a price tag of £336,241.
Over the same twelve month period, the UK’s supply of available properties has fallen by 7%. This has been taken as a clear and significant factor in fuelling price rises and in maintaining an upward trend even as activity has slowed in the wake of a stamp duty surcharge for investors and the uncertainty of the referendum. Indeed the fastest-growing region, the East of England, was one which has been experiencing a situation of especially pronounced undersupply.
The only regions which experienced increases in supply, albeit small, over this period were Greater London and the South East. These areas experienced increases in stock levels at a rate of 2% and 1% respectively.
One of the regions that did experience a fall in prices was London. Activity in London has been comparatively restrained lately. High prices have made it difficult for people in the city to become owner-occupiers, and this in combination with comparatively low levels of price growth and lacklustre rental yields has led many investors to begin favouring other parts of the UK when buying a property. This slowdown is likely the reason that asking prices in the capital have become more modest while those in the rest of the country have been on the rise.
Home.co.uk predicts that other regions will soon see the kind of strong growth that the East of England has experienced recently. In particular, the firm points to the Midlands regions. Supply of homes for sale has fallen by 13% in the East Midlands and 14% in the West Midlands year-on-year, leading to predictions that these areas could be next in line for a surge in prices. Prices in these regions have already rising at a robust rate. Home.co.uk’s figures for June show that asking prices in the East Midlands have risen 0.4% since last month and 5.3% in a year, whereas those in the West Midlands are showing a month-on-month rise of 0.7% and a year-on-year rise of 6.7%.