Property values surge in December

House prices jumped during December 2016 and was the largest increase since the previous December, resulting in £1,000 being added to the cost of an average property.

October and November 2016 reported zero price growth, while reports indicated an increase of 0.8% in December. According to the Nationwide Building Society, the price of an average home is now £205,898. At the end of 2016, house prices were 4.5% higher than at the start of the year, a similar level to those at the end of 2015. However, London’s property prices increased less than the UK average, for the first time since 2008.

Although interest rates are at their lowest for many years, affordability is still a problem for people in some areas of the country. Affordability has become a problem for house buyers in London and the south east, while buyers are finding that it isn’t as much of a problem in the north, East Midlands and Scotland. In the south east, a house will cost a buyer 6.5 times their annual income, while a buyer in the north can expect to pay 3.5 time average earnings for a house.

House prices are expected to continue to increase, although the chief economist for Nationwide believes that may be a modest 2% over the year. The increased demand for affordable homes and the shortage of supply will also fuel the rising property prices. If considering buying a house during 2017, it may be useful to speak to a CeMAP qualified mortgage adviser for assistance seeking a mortgage.



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