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Insight & Opinion

House prices become more realistic, as values rise

Author: Gemma





Property investors will be pleased to see house prices become more realistic in the UK, at the same time as values continue their ascent.

The latest LSL Property Services/Acadata index found that property prices increased by 11.3 per cent in 2014, taking the average value to £280.733.

Property investors have also seen capital appreciation of 0.8 per cent during November, causing home values to reach record highs.

Combined with changes to stamp duty, which will increase demand and allow sellers to price properties more realistically, home value increases mean investors have the power in the market once again.

Chancellor George Osborne recently announced that stamp duty boundaries will change, encouraging more people to buy and putting an end to negotiating prices according to threshold barriers. Previously, many were pricing their properties cheaper to avoid them falling in a high stamp duty band.

Buy-to-let properties are continuing to be popular, but investors should think about regional conditions before committing.

David Newnes, director of Reeds Rains and Your Move estate agents, explained: “These figures are spurred on by London and the South East, where the housing recovery has been fast-tracked. When these
regions are removed from the calculations, a calmer 5.7 per cent annual rise in house prices materialises, the largest divergence on record.”

Price growth in London has picked up the pace again, with prices in areas such as Kensington and Chelsea, and Hammersmith and Fulham growing by 5.3 per cent over the course of the month.

Average values in London are now 1.9 per cent higher than September, pushing annual price rises to 19.7 per cent for the year to October in the capital.

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