In the months following the referendum vote to exit the European Union (EU) house prices have continued to rise despite contrary predictions. In the year to August official statistics show that house prices increased by 8.4 per cent. This shows a rising trend since the vote because in the year to July they were up 8 per cent, according to numbers released by the Office for National statistics (ONS).
The average house buyer in the UK now needs to find £219,000 for their home and this has gone up by £17,000 from August last year. Between July and August this year the average house price went up by £3000.
East of England Prices Fastest-Growing
The average London house will now cost £489,000, but London is not the area with the strongest growth. That title is held by the East of England where prices increased by 13.3 per cent in the year to August. When looking to the West Midlands however the rise was only by 12 per cent.
Forecasters predict that house prices will remain robust over the coming months because there is a shortage of supply and very strong market demand. Paul Smith, chief executive of the estate agent hart, welcomed the ONS figures as “definitive data” that contradicted the forecasts of a housing collapse if Britain voted to leave the EU.
The lowest price rises were recorded in the north-east where the rate was 3 per cent. The region also has the most reasonably priced housing stock with the average house valued at £127,000.
Possible Trouble Ahead
Of course, rising house prices are not good news for everyone. First-time buyers struggling to get onto the property ladder will find this dismal news. Rising house prices can be especially daunting for first time buyers if they don’t understand the legal process of buying a house. A legal expert often a solicitor is usually used when ownership of a house changes hands. This is to ensure that both the buyer and seller know all the terms of the contract and the deeds to the house. Having a solicitor for a house move is massively beneficial to ensure transparency. For a professional check on your house deeds you could you could use a solicitor Gloucester based company or any other legal experts in the UK. It isn’t worth the risk of not having the proper checks carried out before committing yourself to buying a house.
There is also trouble ahead in the housing market because the extremely low interest rates that we currently have will not continue forever. Many householders have high levels of indebtedness and may already be considering an individual voluntary arrangement (IVA) to manage their debts.
Once interest rates start to rise, as they must, we may find considerable distress in the housing market and the relationship between the level of interest rates and the level of house price rises may reverse, so that as interest rates rise, house prices fall.