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South east and London house price jump in 2015 as housing shortage bites

Average house prices in the south east and London rose sharply last year, outstripping the majority of the country, according to figures released by the Office of National Statistics (ONS) today.

Unsurprisingly, the areas most keenly affected by the chronic housing shortage recorded the highest rises.

The average house price in London and the South East both grew over the course of 2015; in London the average price rose by 9.4% to £536,000, while in the south east the average price jumped by 8.8% to £365,000.

However, both regions were outdone by the east of England which recorded a rise of 9.7% to £315,000, the biggest out of all the UK’s regions.

Despite the government’s recent affordable housing initiative and high-profile housing developments, there still remains a chronic shortage of housing across the country, particularly in London and the south east.

Paul Smith, Chief Executive Officer of haart estate agents, commenting on the figures, believes the new 3% stamp duty surcharge on second homes, due to be implemented in April, also played a part in pushing up prices.

He said: “Today’s data displays another considerable annual uplift in average house prices across the UK, in part driven by increased levels of competition at the end of last year as buy-to-let investors sought to complete on their second home purchase in anticipation of the 3% stamp duty surcharge coming into effect in April.

“As we reach mid-February there is little chance of any investor, especially where the transaction is part of a property chain, being able to complete by April and as a result this market anomaly is tailing away.

Smith added: “However, we are still seeing healthy levels of activity in the property market, across both sales and lettings. One of the ongoing problems last year was a shortage of homes, coupled with a high appetite for home ownership, but the New Year has brought with it enhanced levels of activity and the volume of properties put up for sale has increased 5% annually”.

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