The UK property market has been rather dysfunctional in recent years. Brexit has caused uncertainty, the housing market is facing chronic undersupply, and stagnating wages have put many off from buying.
As a whole, the property market in the UK is currently predominantly influenced by house prices and low interest rates. House building has picked up slightly and a possible “Brexodus” has started taking place.
Looking at the big picture doesn’t always reveal the interesting regional trends. What does the current UK property market look like region-by-region?
London’s housing market has often been the driving force of the UK property market, but the capital is not doing quite as well as it used to. According to UK’s largest mortgage lender, London’s house prices rose by just 1% in 2017. Halifax points out that this is the slowest increase in six years.
However, Halifax also points out that London is one of the few regions in the UK that has seen property prices increase from what they were a decade ago. Although the rate of increase has slowed down, the prices are still up by 45% from 2007.
London is also showing signs of increasing pressure within its property market. The Office for National Statistics published its most recent data, which shows a price decrease of 0.7%. The capital still has the highest average house price at £485,000.
The ONS has also started keeping an experimental price index, which tracks the rental prices from private landlords. This shows London rents decreasing by 0.3% in the 12 months to August 2018.
What about the rest of England? Different English regions faired very differently in the Halifax report, which is based on the mortgage lender’s own data. East and West Midlands saw their house prices improve by 8% and 5% respectively. Price growth was more moderate elsewhere.
The most recent ONS data presented England with a 3% price increase over the year to July 2018. The average house price reached £249,000. In terms of rental properties, England saw private rentals go up by 0.9%.
Wales has been performing relatively well and in the Halifax report, it was one of the regions with the strongest growth. According to Halifax, house prices went up by 8% in 2017 in Wales. However, house prices in Wales are still lower than they were a decade ago.
The ONS data also showed a similar growing trend in the early months of 2018. House prices in the region have gone up by 4.2% and the average house costs around £157,000.
For private rented accommodation, rents in Wales went up by 1%. Wales is experiencing relatively strong demand, which is helping to increase the prices.
Scotland’s house prices fell by 0.2% in 2017 according to the Halifax report. However, the ONS data paints a much more positive picture. It shows the average house price to have gone up by 3.2%. The average price currently stands at £152,000.
The ONS data shows that rental prices increased only slightly. The 12 months to August 2018, Scottish rents rose by just 0.5%. The weak growth is considered to be down to stronger supply and weaker demand in the region.
According to the Halifax report, the property market in Northern Ireland looks the gloomiest. It showed prices in Northern Ireland to have fallen by 5.6% in 2017.
However, the latest figures by ONS are showing a slight pickup. According to the data, house prices have picked up by 4.4%, with the average price reaching £133,000. Northern Ireland had the biggest increase in its private rental prices. It witnessed a rise of 1.7% in the 12 months to June 2018.
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