Region’s house prices increase faster than national rate
PUBLISHED: 09:15 15 June 2016 | UPDATED: 09:15 15 June 2016
House prices in the region have soared by more than the national average over the past year, government figures have revealed.
House prices in east Suffolk have increased faster than the national average to break £250,000 for the first time, official figures show.
New government statistics show the average price of a property in Suffolk Coastal reached £261,177 by April 2016 – up 10.6% on the previous year - to make it the most expensive district in the region.
Prices in Babergh and St Edmundsbury also moved past £250,000 for the first time after increasing by more than the national average of 9.1%.
All three districts recorded house price growth above £23,000, which is more than their median recorded annual salary, prompting fresh fears for first time buyers.
The average house price in Essex was £244,612 in April 2015, but by this April it had risen to £274,692, an increase of 12.3%.
The UK average was an 8.2% rise.
However estate agents in east Suffolk say the rate of increase had already started to slow and would be unlikely to return to such high levels.
Peter Watson, director of Flick and Son estate agents, said the figures had been inflated by a rush of people buying second homes on the coast before stamp duty changes were introduced in April.
“There was enormous activity to get deals completed by the end of April but since then it’s been quieter,” he added.
Mr Watson, who is also the Royal Institute for Chartered Surveyors’ Suffolk spokesman, said the stamp duty changes had also meant fewer-buy-to-let properties had been sold since the start of the financial year.
With tax changes, coupled with uncertainty over the EU referendum, Mr Watson said growth was likely to be slower during the current year.
“In Suffolk, and east Suffolk in particular, the reduction is hedged by the fact it’s still such a nice place to buy property, so we will always have a market but I’m not sure we can expect to see the same sort of increases we’ve had over the past year,” he added.
Oliver Johnson, partner at Clarke and Simpson in Framlingham, said the driving factors behind last year’s growth were the region’s “unspoilt beauty” and the value for money it could still offer compared with London and the home counties.
“Lots of people were selling up, cashing in and moving to Suffolk,” he added.
“Places like Aldeburgh, Thorpeness and Southwold along the coast and the lovely market towns such as Woodbridge have been driving the increase.”
Natalie Abrahams, sales manager at Boydens estate agents in Colchester, said the increase in Essex could be down to demand outstripping supply.
Miss Abrahams said: “I think a lot of this is due to a lack of property coming onto the market. Everything is selling quickly. There are cases of 10 buyers to each property, which is causing a price rise as there is not the supply to match.
“It is hard to say whether it will continue. Eventually I think it’s got to level itself out.
“The comment we keep getting is ‘we are not coming on the market because there’s nothing to buy’.
“Once that vicious circle gets broken we might see more people coming into the market.
“With so much new-build around it’s hard to believe we have a lack of supply, but there are a lot of people who won’t buy new-build.”
Mike Deacon, who represents Felixstowe at Suffolk Coastal District Council, said the increasing house prices could be a “tragedy” for first time buyers and highlighted the importance of ensuring developers met their affordable homes contributions.
“Often we are seeing developers, who are supposed to make a third of their homes affordable, coming to the council and trying to back out of their obligations, which we cannot allow to continue,” he added.
Suffolk Coastal’s cabinet member responsible for planning, Tony Fryatt, said the council had introduced more initiatives to encourage delivery of affordable homes.
“There’s a whole multitude of reason why these prices are going up but the fundamental thing is we need to build more and more houses,” he added.