Proportion of £1m+ homes remains unchanged despite rising prices

Pace of house prices picked up towards the end of 2016

The average UK house price rose by 1.4% in December, taking 2016’s final tally to +7.5% (+7.2% in the year to December), according to the latest official Land Registry/ONS House Price Index. That 1.5% is 1.6% above 2015’s level, and puts 2016 as the last decade’s fourth most inflationary year.

Annual rate of change UK HPI, all dwellings from 2006 to 2016

Year % United Kingdom % Great Britain % England % Scotland % Wales % Northern Ireland
2006 7.8 7.3 6.6 14.0 7.5 28.1
2007 9.9 9.1 9.0 14.8 6.7 40.3
2008 -4.3 -4.0 -3.9 0.0 -5.1 -17.0
2009 -8.6 -8.3 -8.3 -4.8 -7.7 -19.1
2010 5.8 6.0 6.6 1.6 2.6 -6.8
2011 -1.4 -1.2 -1.3 -1.8 -1.9 -12.1
2012 0.4 0.8 1.3 -3.3 -0.4 -11.2
2013 2.6 2.7 2.9 0.4 0.4 -2.8
2014 8.0 8.1 8.3 4.7 5.0 7.7
2015 5.9 6.4 6.8 4.0 2.8 7.3
2016 7.5 7.6 8.2 2.0 4.3 6.6

Source: UK HPI Annual Review

Property prices and Consumer Price Inflation have had a bouncy relationship this decade. Property has been outstripping consumer prices for the last couple of years, although the pace of house price growth has dropped recently, while consumer inflation has picked up, resulting in some narrowing of the gap in the last six months.

UK House Price Index Vs Consumer Price Index

Interestingly, the proportion of £1m+ homes has not changed in the last year – despite generally rising prices…

Distribution of Great Britain house prices as a percentage

% 2014 % 2015 % 2016
under £100k 13.7 12.6 12.3
£100k to £200k 40 37.4 35.9
£200k to £300k 23.3 23.5 23.2
£300k to £400k 10.3 11.9 12.6
£400k to £500k 5.3 6 6.5
£500k to £600k 2.4 3 3.4
£600k to £800k 2.5 2.9 3.2
£800k to £1m 1.1 1.2 1.3
over £1m 1.4 1.5 1.5

Greater London slightly outperformed the rest of the country, posting 7.7% growth for the year after +1.8% in December; the average property now costs £483,803 in the capital, compared to £236,424 across England, and £219,544 in the whole UK.

But it was the East of England, not London, that’s seen the most significant price inflations: property values here have risen by 11.3% in the last 12 months.

Government stats indicate that transactions stayed pretty constant towards the end of the year, nudging up by just 0.2% between November and December; deal numbers are still 8.5% below 2015’s level…

The Land Registry’s most recent tally of completed transactions – for October 2016 – tells a familiar tale of big year-on-year declines: the number of completed house sales in England fell by 34.5% to 58,853 compared with 89,884 in October 2015; the number of completed house sales in Wales fell by 25.9% to 3,415 compared with 4,610 in October 2015; the number of completed house sales in London fell by 44.9% to 6,166 compared with 11,200 in October 2015.

Price change by region for England

England by region Monthly change % since November 2016 Annual change % since December 2015 Average price December 2016
East Midlands 1.0 7.1 £176,790
East of England 1.9 11.3 £281,513
London 1.8 7.5 £483,803
North East 2.3 4.1 £128,631
North West 1.9 6.6 £152,259
South East 1.7 8.5 £316,026
South West 1.3 7.0 £242,808
West Midlands 0.4 7.1 £181,328
Yorkshire and The Humber 2.2 6.5 £154,985

Average price by property type for England

Average price by property type (England) December 2016 December 2015 Difference %
Detached £358,812 £331,013 8.4
Semi-detached £218,802 £203,031 7.8
Terraced £189,514 £177,739 6.6
Flat/maisonette £223,008 £205,939 8.3
All £236,424 £219,582 7.7

Average price by property type for London

Average price by property type (London) December 2016 December 2015 Difference %
Detached £907,046 £844,884 7.4
Semi-detached £576,108 £536,465 7.4
Terraced £494,231 £462,912 6.8
Flat/maisonette £430,554 £398,893 7.9
All £483,803 £450,053 7.5

Sales volumes for England

Month Sales 2016 England Sales 2015 England Difference %
September 64,311 82,452 -22.0
October 58,853 89,884 -34.5

Sales volumes for London

Month Sales 2016 London Sales 2015 London Difference %
September 6,698 11,065 -29.5
October 6,166 11,200 -36.5

Funding, buyer and building status for England

England Monthly price change % since November 2016 Annual price change % since December 2015 Average price December 2016
Cash 1.3 7.3 £221,888
Mortgage 1.7 7.9 £243,757
First-time buyer 1.7 7.4 £198,325
Former owner occupier 1.6 7.8 £268,323
New build 11.5 26.0 £335,416
Existing resold property 0.9 6.4 £230,285

Funding, buyer and building status for London

London Monthly price change % since November 2016 Annual price change % since December 2015 Average price December 2016
Cash 2.1 7.8 £512,775
Mortgage 1.8 7.4 £474,924
First time buyer 1.9 7.5 £423,249
Former owner occupier 1.8 7.5 £545,667
New build 10.9 23.4 £563,322
Existing resold property 1.1 6.2 £477,549