House prices in East of England soared by fastest rate in UK in 2015
13:07 17 February 2016
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Average house prices in the region rose by the fastest rate in the UK in 2015 – rising by more than £25,000 to reach a new record figure of almost £315,000.
The East of England’s average property price rose from £287,193 in January 2015 to £314,704 in December 2015 – an increase of 9.6% – Office for National Statistics (ONS) data showed.
It comes after an investigation by this newspaper revealed this month how home ownership is becoming a distant dream for the region’s young people. The scale of challenges facing first-time buyers was described as reaching “crisis” levels as property values continue to soar and outstrip stagnant wages, while the region suffers from a lack of housebuilding.
Last night, estate agents warned that the latest ONS figures, published yesterday, further underlines the price hurdles faced by those trying to get on the property ladder.
Victoria Moffett, external affairs manager at the National Housing Federation said:
“The East of England is a fantastic place to live with a variety of villages, towns and cities that many rightly aspire to build a life in. But sadly, this dream is coming at an ever-increasing cost.
“The National Housing Federation’s Home Truths report for 2015/16 showed that 62,950 fewer homes were built than needed to meet demand in the last four years in the region.
“This can only be tackled by building more homes of all types for rent and sale. Housing associations manage over 260,000 homes in the East of England and are key partners for government as we seek to work together and end this crisis for good.”
The 2015 rise was also the biggest yearly increase in the region since 2002, when the figure rose by £33,000 between February, when ONS records began, and December.
John Knighton, listings negotiator at Jonathan Waters estate agents in Ipswich, said: “If you wanted the market to return to normal, you would stop buy-to-let mortgages and then the market would rely on first-time buyers and prices would therefore adjust. That is the distortion in the market.
“Or do we have a change of culture, with older people who have growing children no longer aspiring for their children to own a property and accept that they will rent.
“I think (some families are giving up owning a home). There is a shortage of properties and values may well come in higher than suggested.
“We just have to ask ourselves: are salaries rising at the same rate as property values, and the answer is almost certainly not.”
Harry Wass, valuer for estate agents Flick & Son in Aldeburgh, said: “The house price increase in the East of England isn’t much of a surprise given it’s a fashionable destination for people in the Home Counties and London to either invest in, come up for a holiday or even purchase holiday homes here.
“We are also seeing a large migration of people from the likes of Hertfordshire moving over to the coast as well. We are seeing a good level of interest of properties in the coastal region, which is boosting these figures.
“As the largest growth since the recession has been in London, I think a lot of people have been moving out of London and looking at investing in a larger home in the Home Counties. Subsequently, these people have then been, because of the growth in their towns, moved further out themselves. It is like a ripple effect where we are further down the line. We are seeing it a little bit than London and the Home Counties and the slow process of house sales means this takes a little bit of time.
“And for a lot of counties north of London, we are the nearest coastal destination. We are generally an unspoilt region and it is very appealing for a lot of people.”
He added: “These figures are regional so you are going to find there will be bigger increases in holiday destination towns like Southwold, Aldeburgh, Orford and Woodbridge, which has certainly grown as well.
“But there will be less growth the house prices in some other areas, still making it affordable to purchase.”
Nationally, Paul Smee, director general of the Council of Mortgage Lenders, said improving economic conditions and schemes to give first-time buyers a helping hand like Help to Buy are behind the increasing lending figures.
He said: “The market has seen a gradual upward trajectory over the past few years, rather than rapid growth, and we would expect this trend to continue with gross lending steadily increasing over the next two years.”
But Campbell Robb, chief executive of Shelter, said the rising cost of a home means many people are losing hope of getting on the housing ladder.
Mr Robb said: “Those without help from the bank of mum and dad are facing a lifetime trapped in expensive and unstable private renting.”