Liquid error: wrong number of arguments (2 for 1) UK house prices dipped slightly in December, say latest ONS figures | Marsh & Parsons Sales and Lettings Estate Agents London

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UK house prices dipped slightly in December, say latest ONS figures

Wed 17 Feb 2016

UK house prices increased by 6.7% in the year to December 2015, down from 7.7% in the year to November
2015, according to the latest figures from the Office of National Statistics (ONS).

Prices were up year on year by 7.3% in England, by 1% in Wales, and by 1.5% in Northern Ireland but fell by
0.2% in Scotland.

The annual growth in England were driven by an annual increase in the East of 9.7%, in London by 9.4% and in
the South East by 8.8%.

Excluding London and the South East, UK house prices increased by 5.1% in the 12 months to December 2015
but on a seasonally adjusted basis, average house prices decreased by 0.2% between November 2015 and
December 2015.

The data also shows that in December 2015 prices paid by first time buyers were 6.4% higher on average than in
December 2014 while for owner occupiers (existing owners), prices increased by 6.9% for the same period.
Average mix-adjusted house prices in December 2015 stood at 301,000 in England, 175,000 in Wales,
193,000 in Scotland and 148,000 in Northern Ireland.

According to Peter Rollings, chief executive officer of Marsh & Parsons, existing home owners have every reason
to be in high spirits after the tenacious house price growth experienced in 2015 which saw average values break
through the 300,000 barrier.

He also believes that buyers climbing onto or up the property ladder are hitting the ground running, on the back of
favourable mortgage deals and support schemes from the government.

In London, weve seen new buyer registrations in January increase 24% on last year, which bodes well for
purchase activity in the opening months of 2016. Landlords and investors in particular will be in a hurry to secure
their preferred property before the additional 3% Stamp Duty becomes liable on second homes in April, he said.
But with annual house price growth in London just shy of double digits, first time buyers and those trading up also
cant afford to hang about either. The prime central London market has been challenged and unsettled by steeper
Stamp Duty, but in lower priced boroughs further out of the centre, high demand and low supply of properties
coming up for sale are sustaining strong price rises, he added.

Adrian Gill, director of Reeds Rains and Your Move estate agents, believes that the property market is
developing into the strongest sellers market since the recession. December may have weathered the first month
on month stumble in house price growth for eight months, but on average, property prices are still increasing at
more than twice the pace of earnings, which is certainly jubilant news for existing home owners, he said.
Potential sellers would be advised to get their property on the market now to take advantage of the spring surge
that is already following these figures for December. But rising prices make it tougher for those still hoping to
climb onto the property ladder. While Help to Buy is worthwhile, the best thing the government to do now would
be to look at freeing up supply, rather than adding further help to get a mortgage. Cheaper mortgage finance and
help with deposits are one thing, but supply is now the bottleneck that needs to be freed, he added.
Jonathan Hopper, managing director of the buying agents Garrington Property Finders, pointed out that price
growth is gradually becoming more broad based, with prices in North East England, long one of the weakest
performing regions, rising by nearly 1% during 2015. Other northern hotspots such as Manchester are slowly
pushing up average prices too.

Though Britain's builders are responding to soaring levels of demand for homes, they are clearly unable to keep
up as evidenced by the news that more than 70,000 renters have joined the queue to buy discounted houses and
flats under the governments Starter Homes scheme, even though it has yet to launch, he explained.
But while undersupply remains endemic in many areas, there are early signs that demand may be softening as
would be buyers reassess and decide to save longer to secure the home they want. 2016 could be a decisive year
as a modest increase in supply and a slight softening in demand could ensure double digit rates of price growth
become a rarity, he added.

But with interest rates not predicted to rise for at least another year, high levels of buyer confidence and estate
agents reporting a severe shortage of stock in many price brackets, the upward pressure on prices remains
unchecked, he concluded.

The figures reveal the patchwork nature of the UK's property market, according to Mark Posniak, managing
director at Dragonfly Property Finance and he predicts that further price rises in are almost certain.
The severe imbalance between supply and demand and the continued low interest rate environment are placing
upward pressure on values. Volatile stock markets are also fuelling the demand for property. Property continues
to be seen as a safe port in a storm, he said.

Meanwhile, Rishi Passi, chief executive officer of Oblix Capital, believes that the full impact of the buy to let
surge caused by the 3% extra tax on additional homes has yet to be seen. As we edge closer to April, the
predicted surge in buy to let driven purchases is still expected, although we may well not see this hit the market
until January when those enquiries made in December complete. As others follow suit, we can expect the market
to begin to boil over the next few months, he said.

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