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Buoyant consumer confidence to support house prices in Ealing

  • main chart
  • The latest ONS UK Price Index, released last week, reveals that in June, UK average house prices increased by their highest annual rate since November 2004. The yearly increase of 13.2%, equivalent to £31,000, took UK house prices to a record level of £266,000. Between April and May, prices rose by 4.2%, far outstripping the rise of 0.5% seen in the previous month.

    However, recent price data from Nationwide shows that this record annual growth slowed to 10.5% in July, down nearly 3% from their June figure of 13.4%. They consider the fallback 'unsurprising' in the context of gains from April to June, which at 1.6% were more than six times greater than average.

    Looking at the volume of transactions, the ONS report that at almost 200,000, sales in June were 74% higher than in May and about double the typical monthly level. Nationwide are confident this was primarily due to buyers rushing the beat the deadline of the 30th, after which the nil stamp duty threshold fell from £500,000 to £250,000. However, they note that the effect of recent house price increases largely wiped out stamp duty savings. For example, the stamp duty saving of £15,000 on a £500,000 property compares with a price increase of £57,000 over the last year.

    Although the alteration in stamp duty may have affected the timing of people's moves, Nationwide believes that changes in housing preferences are driving the housing market. They point to the continuing shift towards higher-priced properties and note a 37% increase in sales of properties valued at over £500,000 in Q1 this year. Sales of detached homes over the first six months of this year have risen to 30% of the total, compared to the five year average of 25%. ONS data shows the impact on prices of this increased demand for larger homes. Their price by property type statistics shows that whilst detached homes saw an annual price increase of 15.6% in June, the annual price growth for flats and maisonettes was around half this, at only 8.4%.

    In Ealing, prices have changed by a total of 11.4 per cent over the last five years. This is equivalent to an average annual growth rate of 2.28 per cent. This demonstrates clearly, the continuing desirability of our local market.

    Nationwide predict that the combination of low-interest rates, increased consumer confidence, and lack of supply will continue to support house prices in the short term. Despite the impetus from people wishing to trade up to larger homes, they express uncertainty about the effect of a potential rise in unemployment on the market towards the end of the year.

"In Ealing, prices have changed by a total of 11.4 per cent over the last five years. This is equivalent to an average annual growth rate of 2.28 per cent."

chart 1

Sales by type in recent quarters

Looking at quarterly sales charts, we can see the volume of properties sold for each type over the last two years. Whilst people are quite understandably most concerned about house prices, particularly the price of their house, property geeks like us actually look more at sales volumes to take the pulse of the market.

Prices over time in the local area

We wanted to take a look at how overall average prices of flats and houses have changed in the last eight months. This is quite a short timeframe so there's a fair bit of volatility from month to month but the story it tells is an interesting one nonetheless.
chart 2
chart 3

Most common property types

Property sizes are an essential measure of the supply profile of homes in a housing market. More densely populated areas are dominated by smaller types of home while there reverse is true for less densely populated areas like suburbs and rural areas. This chart shows the number of flats and houses by bed count.

What’s going on in the market?

  • Average price for a home
    £
    in
  • How much have average prices changed?

    %
    in the last year
    %
    in the last 5 years

    What’s the average price per square foot?

    £ psf

    What’s the average price for a new home?

    £

Sales Market in

How many homes changed hands?

in the last year

Sales numbers have changed by

year-on-year

Average price in England & Wales

Average price in London

By property type Apartments Terraced Semi-detached Detached
 

Average price

Price change

last 12 months

Proportion of all sales

XX

Lettings Market in

What is the average rent for a house?

per month

What is the average rent for a flat?

per month

Rents have changed by

in the last 12 months

What is the average rental yield?

gross annual yield

What is the average age of local residents?

How old are first-time buyers on average?

What price point marks the top 5%?