More predictions and EU comparisons
Following the recession, broadly speaking prices in Oxfordshire started rising in January 2013 and have continued to increase since then. Next year the forecast is for further price rises, but there are also warnings of a slow down so once again the lack of a crystal ball is making the market difficult to predict. A recent Rightmove report suggested a 30% plus rise over the next five years. One thing is fairly certain, there will be a blip in April and May due to the general election because all parties are talking about the property market and there are some radical ideas. But how have we preformed against the rest of Europe?
The UK had the third highest annual increase in house prices amongst member states, behind Estonia and Ireland, according to data published by Eurostat. Estonia recorded price rises of 14.5% between April and June compared to the same period last year. That figure was 12.5% in Ireland and 10.2% in the UK. France and Spain, where hundreds of thousands of British expats and holiday makers have invested in property, performed poorly. Spain recorded price rises of just 0.8%, while in France property prices fell 1.1% over the period. However, Spain at least appears to be levelling out. The rise in Spanish prices was the first annual increase since 2008.
Much of the UK’s growth was in London where a shortage of homes and strong foreign investment drove prices up. However all regions of the UK have experienced price rises of some degree in the last 12 months, buoyed by cheap mortgage rates and Government schemes such as Help to Buy.
French property remains overvalued on certain key measures. A study by The Economist last month found prices were nearly 30pc too high. Eight countries suffered house price falls over the 12 months including Italy and Cyprus. Slovenia was by far the worst affected country where prices fell by almost 10%. Across the EU prices rose by an average of 1.7%, while euro zone countries saw prices remain flat over the period. On average prices are still well below their 2007 pre-crisis peak, which is not the case in parts of the UK.