House prices soar by £16,000 - the biggest rise in four years
THE value of the average home has soared by £16,000 in 12 months – the biggest single leap in four years.
And the surge shows no sign of slowing with annual house price inflation hitting 9.5 per cent last month, according to Britain’s biggest building society Nationwide.
As the figures were revealed, Housing Minister Kris Hopkins faced an outcry from housing charities for saying rising prices are “a good thing”.
He was forced to deny that Government policies are fuelling soaring prices, leaving more and more people unable to afford to buy.
While some get a leg up with the Help to Buy initiative – with the Government underwriting loans to buyers with low deposits on new-build homes – many more are simply priced out.
Campbell Robb, chief executive at housing charity Shelter, pointed out that home ownership in England has fallen to its lowest level since 1987.
Mr Hopkins admitted there was still a “woeful” shortage of housing supply.
But for those who do own their own homes there are rich pickings as the market recovers.
Robert Gardner, chief economist at Nationwide, said: “There’s little doubt that the recovery in the housing market is now firmly established, with activity levels picking up and house prices recording their 15th successive monthly increase in March.”
The gap between London and the rest of Britain is the widest it’s been for 40 years, however.
There’s little doubt that the recovery in the housing market is now firmly established, with activity levels picking up and house prices recording their 15th successive monthly increase in March
The price hike in the capital was 18.2 per cent, increasing the price of a typical London home to £362,699.
The South as a whole continues to record the most rapid gains in property values. Prices in the outer south-east areas were up by 10.1 per cent year on year, reaching £217,534 on average, while those in the outer metropolitan areas rose by 10.6 per cent to around £273,998.
However, Stuart Law, of property investment company Assetz, said: “The ripple effect from London has most definitely reached the North.
“Price rises of 18 per cent year on year in the first quarter in Manchester matches London and confirms its place as a hotspot for growth.
“However, the lack of new build means demand is not meeting supply.
“There are only around 39 brand new homes for sale in Manchester and there is a growing appetite to buy off-plan.
“One area of north Manchester has seen prices double in the last 12 months from £65,000 to £135,000.”
Nationwide put average Manchester house prices at £211,748. Overall prices in the North edged up by 5.9 per cent, to an average of £119,702.
In East Anglia, values rose by 9.5 per cent to around £179,718. In the south west they jumped by 7.4 per cent to £198,325.
Scotland was one of the most buoyant markets, with prices 7.6 per cent higher than a year ago, at an average of £138,386.
Northern Ireland was up by 5.4 per cent to £114,495, but the weakest annual growth was in Wales, up 5.2 per cent to a typical value of £139,911.
In his Budget last month the Chancellor extended the Help to Buy scheme to the end of 2020, partly in a bid to boost construction jobs.
Mr Hopkins was pressed to defend the scheme on BBC’s Newsnight on Tuesday.
As the row with housing charities flared he won backing from MP Graham Brady, chairman of the backbench 1922 Committee, last night giving the annual Keith Joseph Memorial Lecture.
He said: “Home ownership not only generates personal wealth and means people have somewhere to live; it also gives a psychological sense of worth... as well as the comfort of knowing we have something to pass on to future generations.”
Shelter’s Mr Robb warned: “No matter how hard young people and families work or save, these days most simply can’t afford a home of their own and are facing a lifetime of unstable renting.”