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House prices still rising as UK construction remains flat

Sep 09, 2015
There was a time when we were all looking for the prices of houses to stabilise and even start rising again as a sign that the economy was recovering, confidence returning and, hopefully, people would start moving again.

Undoubtedly some of those wishes have come true and the UK moving industry is definitely in better shape than it was a couple of years ago, but the economic data is still only partly encouraging.  

According to the Land Registry House Price Index for June 2015, the UK is showing an annual house price increase of 5.4% taking the average price of a house in the UK to £181,619, overtaking the previous peak in November 2007.  It was also encouraging that the greatest monthly rise (3.0%) was in the North East, an area where recovery has been slow to emerge.  

However the reason for the increase is partly because people feel more confident and affluent, but it’s also because the supply of suitable housing for people is restricted.  In the second quarter of 2015 construction growth was flat, the number of completed house sales in April was 19% lower than a year earlier.  Reposessions were down, however, by almost 50% confirming that people are generally better off than they were. 

Adrian Gill, Director of Your Move and Reeds Rains estate agents, understandably perhaps, put a rosy gloss of the figures: "We can see vitality pumping through the veins of the property market again and the heartbeat of house price growth was getting stronger in June.  Relieved buyers and sellers have stirred again after the election stupor, breeding healthier annual and monthly price rises across the country."

That may well be true, however moving companies are not interested in the amount of money that changes hands when a family moves; it’s the number of families moving that matters.  Adrian Gill agrees that this is still a problem.  “Growth in the construction industry was flat during the second quarter of this year, which should be ringing alarm-bells,” he said. “Buyers’ purchasing power has rarely been stronger, but this golden opportunity will be spoiled if there’s nothing for them to buy.”






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