House price growth is slowing in the run up to the election, new data from the Office for National Statistics (ONS) has shown, with London slipping down the list of fastest growing regions.
In January London was top of the pile with 13 per cent year-on-year growth, but it’s been knocked back as its growth slows compared to other regions. Growth was at 9.4 per cent in February – the most recent month for which we have data – putting the capital only third.
After the searing growth experienced last summer prices are continuing to moderate, with London pipped to top spot on the rate of growth table by both the east and Northern Ireland. What is more, the price index in the capital is now 2.4 per cent below last August’s peak.
Peter Rollings, CEO of Marsh & Parsons, says the capital may no longer be alone as a main driver of UK house price growth:
We’re used to London being the country’s house price engine, but today’s figures suggest that the city may no longer be the lone driver.
Prices in London are currently not rising as fast as values in the east of England, as the top-most tier of the market in the capital experiences a slight tail-off in appetite from foreign buyers in light of acute political uncertainty and proposals for a Mansion Tax.
The average price of a house in London is still climbing and is still the most expensive in the country. The capital is suffering from a big problem: there just aren't enough houses.
What is more, according to data from Stirling Ackroyd, the capital is unlikely to reach its target of building 40,000 new homes annually. At present the rate is just 27,470 a year.
Andrew Bridges, managing director of Stirling Ackroyd, said:
The people of London face a problem that politicians have been leaping over themselves to answer. There aren’t enough homes. But our recent research has found that the current rate of planning permissions will only allow for around two-thirds of London’s 40,000 target to be hit.
The Conservative announcement this morning of a £1bn fund to clean up brownfield sites is one welcome suggestion, especially in the space-starved City. But more must be done – and delivered. If the capital can’t provide homes for its people, it doesn’t bode well for the rest of the country’s prospects.