Posted on 1st April 2016

Onwards and Upwards: What will your Home be Worth this Year?

House prices have reached new record highs, according to latest figures, now standing at a UK average of £292,000.

But clearly, the figures, as always, are skewed by London, where the average price of a home now stands at £551,000, after leaping by 10.8% year-on-year.

The North East continues to be the region in England with the lowest average house price, at £156,000, according to the Office for National Statistics data.

It is also the only region where house prices have still to surpass their previous peak reached before the economic crisis in 2008, which is obviously bad news for those who bought right at the height of the housing boom.

According to slightly different data from Rightmove, however, the North East is actually performing better, or at least on a par than many other regions.

From February to March this year, prices rose from £144,999 to £148,484, it says, an increase of 2.4%. Year-on-year, the North East has seen an increase of 3.7%.

So what can we expect to happen to house prices in the North East this year?

Well, its unlikely that well see any huge increases. The Royal Institute of Chartered Surveyors is predicting a modest rise of 3% for the region, taking that average figure up to £160,680 or £153,000, depending on which figures you look at.

Small increases, or no increases, will be music to the ears of first-time buyers who are already facing a long wait to get onto the housing ladder. A recent report found that first-time purchasers in the region will need to save for around a decade before their can buy a home.

For those who can already afford to purchase, relatively low prices mean now may be the best time to buy.

Buy-to-let investors who have fallen out of love with the industry are selling up, following Budget crackdowns which mean the profitability of multiple-home ownership is now waning. A quick search of any property website brings up a slew of investment properties in the region, which would be equally suitable for first-time buyers.

For those still saving up, the Budget has brought some good news, in the shape of the new Lifetime ISA, which starts in April 2017 for those aged between 18 and 40. It means for every £4 saved, up to £4,000 per year, the Government will add £1. The new ISA is designed to replace the current Help to Buy ISA and aims to encourage young people to save for a new home or for their retirement.

For those who are at the younger margins of that age bracket, who are prepared to think ahead, it may well persuade those who might not have saved regularly to set some cash aside month-on-month, meaning that the next generation of prospective first-time buyers may find it easier to pull together a deposit. Unless, of course, we start to see large property price increases in coming years.

 

Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 40 people serving private and corporate clients. For further information go tohttp://www.latimerhinks.co.ukor call 01325 341500

Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.

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