Lack of construction puts more pressure on house prices

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7 Oct 2015

Lack of construction puts more pressure on house prices

Author: Antony Gibson

Data from the latest Nationwide House Price Index suggests that house price increases may start to stabilise, however there is still a risk that a lack of construction and on-going demand from buyers will put more pressure on house prices.

The September 2015 Nationwide House Price Index reveals that:

  • The UK average house price is £195,733
  • South East house prices increased by 5.5% annually, taking the average house price to £247,286
  • Average house price in South East is 26.34% higher than the UK average
  • Average prices in the South are now twice as high as those in the North
  • Price growth in the South exceeded that in the North for the 26th consecutive quarter

Robert Gardner, Nationwide's Chief Economist, comments on the figures: “UK house prices increased by 0.5% in September, with the annual pace of house price growth picking up modestly to 3.8%, from 3.2% in August.

“The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth. However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.

“Indeed, in recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries. Therefore it is unsurprising that most surveyors expect a pickup in house price growth in the months ahead.”

What is happening to house prices in the local area?

Romans takes a closer look at what is happening to house prices across Berkshire, Surrey, and North East Hampshire, in some of the key towns it operates in*.

  • Berkshire house pricesBerkshire house prices


Average house price: £425,462

Annual increase: 7%


Average house price: £297,261 

Annual increase: 12%


Average house price: £486,810

Annual increase: 11%

“House prices in the South East as a whole may have risen by 5.5% annually, but it’s clear that certain areas are seeing even higher increases, with house prices in Reading notably rising by 12%” comments Antony Gibson, Director of Sales at Romans.

“This is encouraging for sellers as the capital growth their properties have accumulated is often surprisingly large. However, with prices expecting to continue soaring we’re advising people to move before it becomes unaffordable, especially if they’re upsizing.”

  • Hampshire house pricesHampshire house prices


Average house price: £252,991

Annual increase: 5%


Average house price: £257,172

Annual increase: 10%


Average house price: £396,303

Annual increase: 15%

“Again, we’re seeing a similar pattern in the Hampshire towns of Farnborough, and Fleet, with annual house price increases of 10% and 15%, respectively” adds Antony.

“Basingstoke house price increases are slightly lower than the South East average with an increase of 5% annually. However, we’re seeing a lot more demand in this area; a combination of the town regeneration project, development of Basing View, and variety of international corporations moving into Basingstoke has seen a surge of tenant demand and exciting prospects for buy-to-let landlords, which we predict will lead to sharper house price increases in the coming months.”

Read the latest investment insight on Basingstoke

  • Surrey house pricesSurrey house prices


Average house price: £383,763

Annual increase: 6%


Average house price: £493,508

Annual increase: 8%


Average house price: £449,092

Annual increase: 13%

“The overall average house price in Surrey is currently £455,280, which is a staggering 132.6% higher than the UK average” comments Antony.

“As more families move away from the capital in search of more affordable housing they’re often attracted to Surrey because of the fantastic commuter links, local amenities, and great local schooling.”

To find out more about the house prices where you live contact the team at your local Romans branch who will be more than happy to discuss the local marketplace and provide an up to date property valuation.


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