UK Property: Average home value increased by £600 in January

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UK Property: Average home value increased by £600 in January

Figures from one of the UK’s largest mortgage lenders Nationwide suggest that there was a month on month increase of 0.5 per cent, equating to an increase of just over £600 on the average UK home. On an annual basis, prices have increased by 1.9 per cent in January, meaning that the average property price is now £215,897, increased from £211,756 during the same period last year.

“Recent data continues to paint a mixed picture. Economic growth appeared to grind to a halt as 2019 drew to a close, though business surveys point to a pickup at the start of the New Year. Labour market data was surprisingly upbeat in the three months to November, with the economy adding

over 200,000 jobs, the largest gain since the end of 2018.”

Robert adds, “Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts, as well as the outlook for global growth.

“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.”

Mike Scott, Chief Property Analyst at estate agent Yopa, observes that the Nationwide data indicates the largest annual rate of growth since November 2018 and suggests that this “Lends further weight to reports of a recovery in housing market confidence following the decisive election result.”

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But not everyone believes the UK property market it out of the woods just yet. Given the difficult markets in some regions over the past three years, particularly in London and the South East where there have been significantly lower levels of activity and a softening of prices, there is naturally a

more cautious reaction to any figures which indicate growth.

Guy Harrington, CEO of real estate lender Glenhawk is one of those who is more circumspect and says: “With mortgage approvals at a four-year high, vendor confidence up and anecdotal evidence of buoyant estate agent enquires, everything seems rosy. This is misleading.

“How we untangle the UK from the EU is one elephant in the room. Even more pressing, until the government takes concrete steps to support homeownership at all levels, starting with stamp duty reform on March 11, structural headwinds will prevent any sort of meaningful housing market recovery.”

There is also perhaps the broader issue in terms of the gap between seller expectations of what their home is worth, and what buyers are prepared to pay; although asking prices appear to have risen since December, as reported by Rightmove last week, anecdotal reports suggest that many buyers

are not convinced that the market has changed substantially enough in their area in such a short space of time.

Then there is another aspect to any ‘bounce’; if more would-be sellers put their homes on the market in a short space of time, this could create a softening in prices due to increased competition between sellers, particularly if buyer demand can’t sustain the increased number of properties available.

It all points to the fact that whilst the ‘feel good’ factor might be returning, sellers may be wise to continue to remain realistic, particularly if they want to secure a buyer and move in the early spring.

Last week figures pointed to a significant uplift in the number of completed home sales in December.

The HMRC Residential Transactions report suggested that a total of 104,670 purchases were concluded last month based on seasonally adjusted data, equating to a 6.8 percent increase on the same period last year, and 6.2 percent higher than in November 2019.

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