House prices continue to rise in Suffolk, but Essex sees a downward trend
PUBLISHED: 14:36 17 October 2018 | UPDATED: 14:36 17 October 2018
House prices in Suffolk crept up by 0.4% in August, contributing to a 3.6% rise over the last 12 months.
The latest data from the Office of National Statistics shows that the average property in the area sold for £246,549 – above the UK average of £232,797.
The average homeowner in Suffolk will have seen their property jump in value by around £69,000 in the last five years.
Across the East of England, property prices have risen by 1.6% in the last year, to £292,107.
The region underperformed compared to the UK as whole, which saw the average property value increase by 3.2%.
The data comes from the House Price Index, which the ONS compiles using house sale information from the Land Registry, and the equivalent bodies in Scotland and Northern Ireland.
In neighbouring Essex, prices declined slightly by 0.3% in August, despite witnessing a 1.1% rise over the last 12 months.
But Colchester managed to buck the downward trend in Essex, with a 0.7% house price rise in August contributing to a 1.6% rise over the last 12 months.
The Suffolk figures showed that buyers who made their first step onto the property ladder in Suffolk in August spent an average of £198,084 – around £55,000 more than it would have cost them five years ago.
The price rise was particularly noticeable in the Suffolk Coastal area, which saw the 17th-largest average price increase of any authority in the UK over the last 12 months. House prices there leapt by 3.7% in August, contributing to a 9.2% rise over the last 12 months.
Lawrence Bowles, associate director of the research team at estate agents Savills, said the uncertainty over the outcome of Brexit negotiations was fuelling a “tougher lending environment”.
He said: “House price growth in real terms is slowing, and inflation is growing at the rate we’ve been used to over the last few months. Buyers, sellers and lenders are all thinking maybe they should wait until they see the outcome of negotiations.
“Longer term, the issue we expect to see is affordability, as we expect the Bank of England base rate to be back above 2% by 2021 – closer to historical levels, rather than the ultra-low rates we have seen in recent years.
“That, combined with stricter affordability stress tests, will make it more difficult for households to demonstrate that they are able to afford mortgages.
“But we would expect to see a bounce at some point, between finding out the Brexit outcome and the start of higher interest rates.”
Between July last year and June this year, the most recent 12 months for which sales volume data is available, 12,588 homes were sold in Suffolk, 4% fewer than in the previous year.
The highest house prices in the country in July were found in Kensington and Chelsea, London, where properties sold for an average of £1.35 million – 16 times the cost of a home in Burnley, where the average property cost just £85,900.