House price optimism: UK house prices continue to rise like never before, research finds

According to Halifax building society, the price of houses continued to grow in the UK by 9.7% during the past year and even rising 1.7% from the Christmas period through to the end of January 2016. This is the biggest percentage increase seen since 2014. Based on these figures the average price of a property would now stand at £212.430.

One of the main factors for increasing prices is down to a massive shortfall in available property. Not enough new builds have been developed over the past few years, causing a backlog.

Property investors have seen the benefits of buy-to-rent and snapped up suitable accommodation. Therefore there continues to be increases not only in house price sales, but in costs of renting.

The Government gave out figures indicating that 250,000 people, half of which were under 30, have opened Help to Buy ISAs since last December. The scheme helps first time purchasers to save in the region of £200 a month tax free, with the Government adding 25%. This would mean that they would contribute some £3,000 when the individual finally buys their home.

Economist Howard Archer said the market was being supported by consumer confidence and low mortgage rates. But of 88 economists who were asked if new Government policy over home ownership and support over building new homes would have any effect on continued house price rises, every one of them felt that it would fail to have any effect on slowing it down. Some even suggested that it would increase demand.

The average cost of buying a home in the UK could reach £300,000 by the end of 2016.  Forecasts are founded on previous increase rates but no guarantee can be made that costs will continue upwards at the same rate. Regional variations in price rises vary greatly: some areas increased by double digits, whilst other areas stalled.

In London the wealthy property areas showed much less of a percentage rise, however others such as Newham experienced a 28.3% growth rate.  Overall prices in the capital have been averaging at 5.6 %. The fastest-growing area was in the South East, where prices went up 8.1 % last year. Luton had the biggest increase of 18.5 %, with an average cost of a semi-detached increasing by £40,000 in two years. Not far behind were the East Midlands with a 10.6% increase.

So it appears that house price growth continues its upward trend throughout the UK, giving the feeling that we are at the moment in a stable market place. The effect of leaving the EU still threatens to shift the ball game for the future, but in which direction, is anyone’s guess.