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News: UK market strongest in the world

Mon, 07 Jan 08

Despite the doom and gloom, the UK market is still full of positives, claims Assetz...

The five major UK house price indices show an average of 8.3% annualised growth for the twelve months prior to November 2007. This shows a 1.6% decrease in the rate of growth from the previous month (9.9%) and a 1.4% decrease since November 2006 (9.7%).

 

As predicted, annual growth is poised to end 2007 at a level of between 7-8% with price growth recording a 14 month low in November, falling back to 8.3%. While this represents a decrease on October’s figure, average house prices remained strong, with just a marginal fall.

The average house price in November 2007, taken from the average price provided by all five major indices is £213,936, down from £214,893 in October. This shows a decrease of £957 in the value of the average property and an increase of £15,367 in the twelve months from November 2006, when the average price of a home was £198,569.

 

Stuart Law, Chief Executive of Assetz comments: “While there has been much suggestion of a problematic era for the property market, there are many more positive signs for the year ahead, with latest buy-to-let figures outweighing any negative outlook, as well as reflecting a hugely successful year for the property investor in 2007.  

“On balance, the UK buy-to-let market is just about the strongest in the world and investors can look back on a successful 2007 with surveys showing excellent returns across the board. While London obviously continues to lead the way, with rents up by almost 20% on average for the year, this positivist is not restricted to the Capital, with excellent figures in areas such as the North West keeping overall annual figures high.

“While the rate of house price appreciation has slowed significantly in November, little can be read into the volatility of recent figures other than to suggest growth is currently between 0% and 5% following buyer caution under a barrage of negative press headlines. This is the result of a widely anticipated period of stabilisation, and is hitting our predicted figure of between 8 - 9% for the end of 2007.

“Although November shows the average house price to be down slightly on the previous month, this does not signal the beginning of a housing market crash, as is being touted by some in the industry. The market will be robust, if a little volatile in 2008, buoyed by immigration, lower interest rates and continued lack of supply. Reductions in new build supply by developers will increase demand for rented property, leading to raised rents and continued strength in the buy-to-let market, with growth across the major indices expected to level at an average 5% for the year.”

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