Average house prices in England and Wales grew 6.6% in 2015, up £17,963 since December 2014 to reach £292,077 according to Reeds Rains and Your Move.
Property values in Central London fell by 8.7% on average during 2015, dragged down by higher Stamp Duty.
Outside of the top five central boroughs, London experienced 11% boost in house prices year-on-year.
East Midlands jumped to second in the regional rankings, driven by a 10.6% annual rise in Nottingham’s house prices.
The firm reported the strongest December for sales since 2006, up 7.1% year-on-year as buyers competed for fewer homes on the market.
Adrian Gill, director of Reeds Rains and Your Move estate agents, comments:
“The housing market has enjoyed some smooth sailing in the past year, with a steady 6.6% growth in house prices during 2015 rewarding homeowners and reinforcing our collective desire to own our own homes. The typical home across England and Wales is now worth £17,963 more than at the end of 2014, with new price records established every month throughout 2015 after twelve consecutive monthly rises. December also marks the highest year-on-year house price growth for ten months, and this may well prompt existing homeowners to move up to the next rung of the property ladder in 2016, freeing up homes at the bottom for first-time buyers. The rising tide of property prices has been propelled so far by a sinking supply of houses coming onto the market, compared with increasing enquiries from potential buyers eager to clamber aboard the property ladder. If the current speed of house price growth continues into 2016, the value of the average home may soon pass the £300,000 watermark, having reached £250,000 in December 2013. Property price rises have certainly left the recession in their wake, with house prices passing the £200,000 milestone only in October 2005.
“During December, house prices rose by £1,650 (0.6%), a pick up from the 0.4% monthly uplift in November, and we may subsequently see prices surge further during the first quarter of 2016 before the Government’s new housebuilding programmes have a chance to boost the supply of property on the market. Home sales have surfed the waves of buyer demand in December, increasing 8.5% compared to November 2015. A total of 85,000 home sales represents the best figure for this month since 2006, with sales buoyed up by the extra support available for first-time buyers and rising wages.
“The tide certainly turned for the Central London housing market last year. The hike to the top rate of stamp duty has taken the wind out of the centre’s sails, with house prices in the most expensive five boroughs falling by 8.7% on average during 2015. In Kensington and Chelsea, London’s most expensive borough, prices fell by 14.2% over the year. The tax changes announced in 2014’s Autumn Statement increased the rate of stamp duty on homes worth over £1.5 million to 12%, and while price increases in the central boroughs used to keep England and Wales’ house price growth afloat, since January they have been anchoring down the average price increases in London – and the country overall. The reality is that there has been an undercurrent of growth in the rest of London, with values outside these top-end boroughs rising by 11% year-on-year. The increase has been strongest in the cheaper boroughs, with Newham seeing 23.8% annual growth. But the overall price rise across the capital has been submerged by the top end, with the annual change in London standing at just 5.6%, below the UK average.
“Regionally, house prices in the South East have been increasing at a rate of knots, enjoying the fastest growth of any region. The 8.1% year-on-year price rise in the South East has been particularly propelled by demand for homes in commuter towns. Luton has seen the largest increase of 18.5% year-on-year, with the average cost of a semi-detached home in the town increasing by approximately £40,000 since 2014. The East Midlands has also seen a significant surge in house prices, overtaking East Anglia to become the second fastest growing region in England. This acceleration has emanated from a boom in the City of Nottingham, which has seen year-on-year house price growth of 10.6%, boosting the region’s overall annual growth rate of 6.7%. Average property prices in the city have risen £14,691 in a year and now stand at £152,978.”