SPI Capital

Anna’s comments on September house price data featured in the press

For many, September will feel like the distant past, but the UK House Price Index remains interesting and useful.

Why? It represents a more complete picture than comparable releases. This is key in a world of ‘lies, damned lies and statistics’!

Thank you to MailOnlineYahoo FinanceProperty ReporterLondon Loves Property & Mortgage Finance Gazette for featuring my comments. Click on links for full articles.

So what does the data tell us?

A 4.7% increase in house prices, with mortgage approvals at their highest level since 2007 suggests a ‘mini boom’.

Many feel this will be short lived, given economic circumstances and forecasts.

However, the ‘fundamental’ drivers of housing demand are strong: we are in an environment of low interest rates, with reduced rates of new buildings coming onto the market and limited existing stock.

Ultimately, increasing house prices are being driven by a combination of new priorities (needing more space) and new policy (SDLT reduction) and were led by detached and semi-detached properties.

New build properties lagged behind existing properties, falling by 1.9% despite the influence of the Help to Buy scheme.

For investors and homebuyers alike, the important thing to remember is that capital growth is a great bonus, but shouldn’t be relied on just because lending is cheap.