Relatively cheap mortgages, growing demand, limited supply and recent changes to stamp duty have all fuelled the fire that has pushed East and South East England property prices to record levels. In February 2016, average property prices in the region reached an all-time high of £263,000.
The rise in prices in the East (+10.3%) and South East (+11.4%) is a significant factor in the UK’s sharp property price hike, which has seen average prices rise by 7.6% in the space of a year – according to fresh figures published by the Office of National Statistics (ONS). In February 2015, the average home in the UK set buyers back £214,000. In the same month in 2016, that figure rose to £284,000.
The East and the South East of England are the UK regions bearing the brunt of the rises. They’re also the drivers behind the UK-wide inflated figures. By comparison, Scotland saw a 0.2% drop in house prices, while Northern Ireland saw more restrained hikes of 2.4% and house prices in Wales rose by 2.8%.
Why the Rise?
According to the ONS, the cause of the rise is a significant gap between supply and demand in the East and South East. With unemployment in decline and mortgages comparatively cheap, more people are feeling ready to buy. This has fuelled a demand for property in an area which has limited housing availability. The high demand and lack of supply has created a seller’s market, sending prices sky-rocketing as competition for homes intensifies.
Another factor is the change to stamp duty which came into effect on 1st April for owners of second properties. The new legislation hits anyone paying £40,000+ on a property, which is not their primary residence, with an additional stamp duty surcharge of 3%, adding £6,000 to the cost of buying a £200,000 property. Buy-to-Let (BTL) landlords, keen to add to their portfolios before the surcharge came into force, have added to the high level of demand for property in the East and South East.
Are you searching for a home or investment property in the East? At Nicholas Estates, we help both buyers and sellers find and sell homes across the Ipswich area. We are your local experts with branches in Ipswich town centre, the Waterfront and Felixstowe. Why not pop in to discuss your plans or give our friendly team a call today on 01473 251098?