House prices increase across whole of UK for first time in nearly two years

February 19, 2020 12:10:28 PM

House prices increased annually across the UK’s nations and regions in December, for the first time in nearly two years, official figures show.

The average UK house price was £235,000 in December, £5,000 higher than December 2018, figures released by the Office for National Statistics (ONS) and Land Registry show.

For the first time since February 2018, all regions saw positive annual growth.

ONS head of inflation Mike Hardie said: “Annual house prices grew across all regions of the UK, the first time this has happened in nearly two years, with London seeing its strongest growth since October 2017.”

Average house prices increased over the year in England to £252,000 (a 2.2% rise), Wales to £166,000 (2.2%), Scotland to £152,000 (2.2%) and Northern Ireland to £140,000 (2.5%).

In England, growth ranged from 1.2% in the South East to 3.9% in Yorkshire and the Humber.

London prices increased by 2.3%, accelerating from 0.4% in November and a 1.2% fall in the year to October.

The report said the sharp rise in London may reflect a shift in the type of properties being sold, with more high value homes potentially changing hands as a result of wider considerations relating to Brexit and other financial issues.

House prices graphic
(PA Graphics)

Sales of very high value properties in London can have a knock-on effect for average prices across the capital.

Purchases of very high value properties may be particularly affected by considerations such as uncertainty, including around the effects of the UK’s withdrawal from the EU, expectations of actual or potential tax changes, and other factors, the report said.

In December, average prices were £574,800 in inner London and £429,500 in outer London.

Lawrence Bowles, senior research analyst at Savills, said: “This index measures values at the time a sale completes.

“The process of buying a home takes time, and generally the deal is agreed a month or more before the completion date.

“That means most of the transactions covered in these December figures were agreed before the general election.

“We’ll have to wait for the January figures to see if there’s real evidence of the post-election bounce in values to match the undoubted improvement in buyer sentiment across the market.”

House prices graphic
(PA Graphics)

He continued: “All eyes will be watching the London numbers, where house prices are right up against the limits of affordability and where sentiment has been particularly impacted by political and economic uncertainty.”

Howard Archer, chief economic adviser at EY ITEM Club, said housing market activity could get a further lift if the Government introduces measures aimed at it in the forthcoming Budget.

He said: “However, the economy still looks set for a pretty challenging 2020 and there will still be appreciable uncertainties, including on the UK-EU relationship front – so that the upside for house prices in 2020 is likely to be limited.”

David Westgate, chief executive at Andrews Property Group, said: “For all regions to have delivered positive annual growth for the first time in nearly two years highlights just how resilient the UK property market has been against a backdrop of extreme political uncertainty.

“There’s a definite sense that the property market has turned a corner and is shaking off its post-EU referendum anxieties.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “These figures reflect what was happening in the months leading up to the (general election) so only show a more solid resilience in activity in what was still quite a turbulent period.”

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