House prices soar by almost 10% in a year – but experts foresee rate of increase slowing
House prices have risen faster in the East of England than anywhere else in the country during the last year, according to new statistics.
The average price of a home rose twice as fast in this region than in London – soaring 9.3% over a 12-month period to reach £295,000 in May.
In May last year the average home was valued at £22,000 less than it is now, but estate agents are not predicting the rise to be as steep by this time next year.
Oliver Johnson, partner at Framlingham based Clarke & Simpson, said: “I think the figures may be slightly rose-tinted by including the more popular and high value areas of south Essex and Cambridge, where there has been substantial capital growth in the last 12 months.
“For the area we cover, 2014 was a generally good year, with an element of capital growth at about 5% plus. The start of this year has been more difficult as capital values have levelled out. We can speculate and say that has been down to the election or the Eurozone issue but it remains a fragile market.
“People have long memories and remember the uncertain times. In another 12 months we may see that percentage increase fall back again.”
The figures, produced by the Office for National Statistics, showed that prices in the East of England are rising quicker than the rest of England.
Only Northern Ireland, which saw a year-on-year increase of 10.5% held this region back from being the fastest climber in the whole of the UK.
Although property prices continue to rise, the rate of increase does appear to be decelerating compared to earlier in the year, when the 12-month gain to March was 11.4%.
The latest figures show the national increase to be 5.7% – taking the average price of a UK home to £274,000.
Meanwhile, first time buyers were paying an average £211,000 to get on the property ladder in May – up £9,000 in just a year.
Here in the East, the average house price has risen £93,000 in the last decade, leading estate agents to sympathise with the plight of first time buyers.
Last year, almost half of all mortgages were leant to borrowers earning more than £50,000. The number of mortgages for those earning anything less has consistently fallen since in the last six years.
Mr Johnson said: “Affordability remains a big issue for first time buyers. Their salaries and the amount they can borrow does not correlate with what they need to spend. Some have to seek help from the bank of mum and dad.
“We are seeing more let-to-buy mortgages where people are keeping hold of their homes, remortgaging on a buy-to-let mortgage and then buying something here with the equity released.
“We are still seeing that ‘A12 migration’ of people selling up in London and parts of Essex and moving here for a better way of life.”