Jan Crosby, head of housing at KPMG, comments on today’s ONS house price figures, which show the average home is now valued at £292,000 following a 7.9% year-on-year increase:
“Today’s ONS figures show a record high, with England outpacing the other areas of the UK for house price growth. When you look further into the facts, the rise is driven as ever by the South East of England, London and the East of England, with the percentage increase in the capital (10.8%) over the past twelve months more than double the rest of England, when London and the South East’s rises are excluded (5.1%). Of course, this comes as no surprise, and highlights both the broken and atypical nature of the market in those areas. As ever, the issue is down to supply versus demand and while last week’s Budget did have measures, such as the Lifetime ISA, which are in part designed to help buyers onto the property ladder, the record didn’t change when it came to generating supply, with announcements effectively repeating or slightly extending previous reforms.
“However, one particular Budget announcement could have an underlying effect on house prices: it will be interesting in a year’s time to see how much prices in the North have inflated, specifically around areas like Manchester and Liverpool, which are set to benefit following the Chancellor’s renewed commitment to infrastructure projects including HS3, the trans-Pennine tunnel and improvements to the M62. It is certainly likely that property investment, especially from abroad, will increase in the North and this will include housing projects – while this might be good for the economy, it could be bad news for those hoping to buy a home.”
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