So plentiful are property market statistics, from so many different sources, that it’s difficult to know which — if any — to trust. We look at some of the stats that have been flying about this week.
London remains uninspiring: the average house price in the capital dipped by 1 per cent in the year to February, according to the Office for National Statistics (ONS) house price index, the first annual fall since September 2009, when it was -3.2 per cent. Capital Economics this week predicted a 3 per cent fall in prices this year and up to 5 per cent in 2019. The figures don’t look pretty in the capital and analysts don’t expect rapid improvement. The average price of a house in London is £472,000, according to the ONS figures. Paul Smith, the economics director at IHS Markit, an analytics company, says the market is subdued in the south because of an unwillingness to move, given the general squeeze on incomes. After a long bull run, house prices in the capital are high relative to household incomes. This means that London is hitting up against the limits of what people can borrow in an age of mortgage regulation. Consequently, we don’t anticipate a return to price growth here until 2020, with the advent of greater economic and political certainty. Yet this doesn’t tell the whole story. The more affordable areas in London are still performing well, with first-time buyers taking advantage of the government’s Help to Buy equity scheme. These include Bexley (3.4 per cent rise in a year, according to LSL, with an average price of £362,458), Barking and Dagenham (3.3 per cent, £307,971) and Redbridge (6.2 per cent, £472,594).
The Midlands is doing very well thank you: Figures that remain consistent across all of the recent statistical releases is the boom in the Midlands. A combination of regional investment in cities, the growth of long-distance commuting, greater affordability and a rise in home-working is leading the transformation.The old north-south divide is turning on its head, with northern areas steaming ahead much faster than the rather sluggish south.
The ONS figures show that the West Midlands has the highest annual house price growth, with prices increasing by 7.3 per cent in the year to February. This is followed by the East Midlands, with a 6.3 per cent rise.