Lack of supply and cheap mortgages continue to fuel price growth in the UK

Taylor Scott International News

Property prices continue to rise in most regions in the UK with growth driven by stock scarcity and cheap mortgages, according to the latest asking price index. Prices in Greater London and Wales dipped 0.4% and in the North East they were unchanged while the East of England led growth with a rise of 1.6% month on month coming on top of a 2% rise the previous month. With prices rising in all mainland UK regions, except Wales and Greater London, overall the mix adjusted average asking price is up a further 0.4% in June, the index shows. At the same time supply has fallen 7% year on year since last month. Only two regions showed small year on year rises, up 2% in Greater London and just 1% in the South East. But according to Doug Shephard, the firm’s director, the main indicators show that the property market is in the best shape it has been since the financial crisis. ‘The slowdown in London may be regarded as a return to a more sustainable market following the frenetic activity observed during 2013/2015,’ he said. ‘Moreover, several regional markets that were left behind in the wake of the Greater London surge are now showing significant activity and price growth. Lack of supply remains a fundamental driver in the current market and the total stock of property for sale continues to be historically very low,’ he explained. He pointed out that the acute supply shortage in the East of England has driven prices ever skyward, up 13.9% since June 2015, and this region is now outpacing London and the South East by a considerable margin in terms of home price appreciation. ‘We anticipate that prices will soon surge in the East and West Midlands in a similar fashion over the next 12 months as the supply of homes for sale has dropped by 13% and 14% respectively year on year,’ Shephard said. He believes that a slower London property market has prompted more modest asking prices. In fact, the mix-adjusted average dipped this month in response to rising marketing times and modest rises in supply and affordability look set to constrain prices going forward. Shephard also pointed out that due to improvements in mean marketing times, the Welsh property market is now the second slowest region, ahead of the North East. ‘Should this trend continue, we may well see prices there rise by more than the mere 1.2% registered over the last year,’ he added. Overall, the current mix-adjusted average asking price for England and Wales is now 6.8% higher than it was in June 2015 and Shephard predicts that this upward trend will continue at least into 2017. A breakdown of the figures shows that in Scotland the average asking price is now £179,131, up 1.1% month on month and up 6.7% year on year, while in Wales it is £184,858, a month on month fall of 0.4% but a year on… Taylor Scott International

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