London leads another steep climb in house prices
Wed 30 Mar 2016
House prices across the country continue to surge. Data published by the Land Registry this morning shows the
average UK property price was 190,275 in February, a 6.1 per cent climb on the same month last year.
London house price growth continued to outpace the rest of England and Wales. The average price in London
was 13.5 per cent higher in February than the same month last year with an average price of 530,368. They
rose 0.6 per cent just in February.
"As the capitals population keeps on growing, the London housing market is getting ever warmer and more
crowded. This is underpinning solid house price growth for sellers. But for buyers and renters it makes entry to the
housing ladder ever more difficult," said Andrew Bridges, managing director of estate agent Stirling Ackroyd.
"Hundreds of thousands of new homes are the only real answer. Mayoral candidates are still reluctant to take on
such a massive challenge but if they want to gain entrance to City Hall on election night, they might have to do
more to help Londoners enjoy the success of the house price party."
Read more: How "Generation Tinder" got locked out of home ownership
The stamp duty rush
In plans announced last year stamp duty will be set at a higher rate from April for any buying an additional home.
This has caused a rush among buy to let investors and estate agents trying to push deals through and could be
providing a temporary boost to house prices.
"There have been a lot of stimulants spurring on the housing market this spring and theres no denying theres
been a palpable buzz in the air," said David Brown, chief executive of estate agent Marsh & Parsons.
"To beat the April 1st implementation of additional stamp duty, second-home buyers and buy-to-let investors
have been frantically pushing through purchase completions as quickly as possible. Weve had documents
collected and delivered by hand across London to solicitors to avoid postal delays, and our teams have been in at
the crack of dawn to make sure all parties involved in the transaction are meeting their deadlines."
Read more: Buy to let investors storm housing market to beat tax hike
A long-term factor in the house price story has been a shortage of supply. A lack of supply of been attributed to a
number of factors such as strict planning permission and green belt rules, a lack of skills in the construction
sector, a smaller number of construction firms, and housing companies restricting land use to push up prices. The
slow growth in the housing supply has impacted sales volumes.
"We need to tackle this ongoing crisis with real action if we are to meet the housing needs of current and future
generations. Building at least 250,000 new homes a year is a must, but this alone may not be enough as the
population grows," said Jeremy Duncombe, director of Legal & General Mortgage Club.
"Innovative new initiatives such as modular housing programmes can dramatically reduce the time it takes to
construct a home, providing another important way of working towards this goal. Other measures, such as a relief
in Stamp Duty for downsizers, should also be considered, as this will help to free up a vast amount of existing
housing stock for those moving up the property ladder."