House prices record surprise 1.4pc increase

Sarah Davidson

January 19, 2015

Property prices increased by £3,798 to reach a UK average of £273,275.

On an annual basis house prices have increased by 8.2%, up from 7.0% in the 12 months to December.

Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Demand for housing is still outstripping supply, and as such we need to be building more houses to enable the market to grow in a sustainable way.

“With increasing demand pushing up prices, the lack of housing supply is making it harder for first-time buyers to enter the market.

“In the run up to the election, the need to build more homes should be at the top of the political agenda.

“More houses would keep supply more in line with demand and stop prices rising out of the reach of large swathes of the UK population.”

According to Rightmove December’s changes to Stamp Duty announced in the Autumn Statement have given the market a boost by allowing first-time buyers to save up to £1,250.

Miles Shipside, Rightmove director and housing market analyst, said: “Early 2015 statistics currently point in the right direction for home-movers, with the Chancellor’s early Stamp Duty Christmas present perhaps being the spur for people making New Year resolutions to get on with moving.

“There are more positive signs of early-bird activity rather than pre-election jitters or economic worries deterring prospective movers.

“However, we are only a few days into the year and it remains to be seen whether this initial flurry is sustained.”

Rightmove has warned sellers that it will be harder to shift homes 2015 compared to the year before, as election jitters are likely to lower the number of property transactions even if prices are maintained.

Shipside added: “The popular properties that most people want will remain sought after and will remain both highly prized and priced.

“Less attractive property is available in many locations but has often been on the market for some time, though it could be an option for choosier buyers if the seller is more negotiable on price.

“Buyers deemed mortgage worthy will value their hard-won purchase pots and want to spend them wisely.

“That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short.

“A property that offers longevity of stay by having adaptable accommodation and scope for increase of floor area will be especially appealing given the costs and upheaval of moving more regularly.”

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