Rising house prices increase social housing concerns

Rising house prices increase social housing concerns



The recent UK Land Registry report published in July 2016 revealed that house prices in England rose on average by 9.1% compared to figures from July 2015.


With the average price of a property in England hitting £232,885 first-time buyers are in for a rough time. 

Rising prices

The highest price rise of 22.7% can be found in South Bucks, with prices rising from £518,430 in July 2015 to £636,215 this July. Other areas of the country with rising property prices include Slough (21.9%), Newham (20.8%), Stevenage (20.3%) and Haringey (20.2%).

But it seems that not everywhere in England is experiencing price rises. For example, prices in the affluent London borough of Kensington and Chelsea actually dropped by 3% compared to prices in July 2015, providing support for the article on Business Insider that cited Brexit as the reason for the dip in the luxury property market. 

Regional differences

There are some areas of the country where prices rose very minimally.

Middlesbrough saw one of the smallest increases of 0.2%, with prices in North Devon (0.4%) and Burnley (0.6%) performing similarly. For those looking to get on the housing market in these regions, such figures will be welcome news.   

Declining sales

It's not just property prices that are changing, though. The volume of sales has also been declining in many areas, with sales figures lowest in the City of London (7) as well as West Somerset (32) and Melton (37). Again, these declining figures (at least in busy cities) could be due to the referendum and a lack of foreign investment.

Sales figures in Outer and Inner London, Greater Manchester, the West Midlands and West Yorkshire remained high in May 2016, with no signs of decline.

Bad news for first-time buyers

House prices have been steadily rising in the UK since 2012 and the latest figures from the 2016 report reveal that they are now as high as they were at their peak in 2014. The age of first-time buyers is on the rise too, rising to 30 in England and 32 in London in July 2016.

With soaring house prices in many big cities and price drops in affluent areas, the market is catering for those who already own a property – this is a good time to sell and move to a new area.

It's not such good news for first-time buyers looking for their first home, unless you're planning to buy in a rural area or are prepared to be flexible on location when it comes to finding an affordable property.

Social housing still a worry

With rising house prices across the country and following the latest data highlighting right to buy sales are the highest they have been in almost 10 years, the availability of affordable housing is likely to shrink.

As reported last month, investment in affordable housing is hard to come by and with more and more individuals purchasing social housing, if no replacements are constructed the housing bubble will only continue to grow. 

Still a better long-term option than renting

Despite rising property prices, buying – especially through the government’s Help to Buy scheme – is economically a superior financial strategy. Research from Strata Homes found that property buyers would typically save around £200 a month by taking out a Help to Buy mortgage compared to those renting privately. The only issue is having the money for the deposit in the first place. 



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