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Daily Mail: Surge in values defies Brexit doom-mongers

Date: 15 02 2017

House prices rise £15,000… and Shetland’s a hotspot! Surge in values defies Brexit doom-mongers (and if you fancy island life, here’s what you can get)

  • Shetland has fastest growing house prices in UK – three times faster than London
  • Annual house price inflation rose to 7.2 per cent in December, ONS says 
  • Average home up by £15,000 in 2016 to hit £220,000, official figures show 
  • First-time buyers hit highest level since 2007, as buy-to-let market slips 

It’s wild, windswept, just a touch chilly – and it’ll take you 13 hours to get there by ferry from the mainland.

But none of that has stopped the Shetland Islands from becoming the hottest of property hotspots.

For Britain’s most northerly outpost officially has the fastest growing house prices in the land.

The price of the average home in the archipelago, which is nearer to Norway than Britain, soared by 26.1 per cent to £178,947, according to the Office of National Statistics and the Land Registry.

This is more than three times as fast as in London, where the average home will now set you back £484,000.

But the ONS and the Land Registry were quick to point out that low numbers of sales in some local authorities can lead to ‘volatility’. In other words, with a population of just over 23,000, just a few sales can dramatically push the average house price up or down.

The uplift in the remote islands reflect a surge in house prices throughout the country, helping the market defy warnings of a major Brexit slowdown. Overall, house prices rose by an average £15,000 to £220,000 – a 7.2 per cent increase.

And despite predictions that the vote to leave the EU in June would paralyse the housing market, house prices actually grew more quickly in 2016 than in the previous year, when they rose 6.9 per cent.

This boom has been buoyed by record lending to first-time buyers, separate figures published by the Council of Mortgage Lenders show.

They borrowed £53.2billion in 2016, up 13 per cent on the previous year and the most since the CML started collecting data in 1974.

In total, home buyers borrowed £127.7billion last year, up 7 per cent.

The value of lending has increased in part because house prices have continued to rise quickly, and there continues to be a shortage of homes for sale. Last night MPs and estate agents said the resilience of the housing market had proved the ‘doom-mongers’ wrong.

Last year the Remain campaign, led by former chancellor George Osborne, warned that even the uncertainty before the referendum would put the brakes on the housing market in the first half of the year as prospective buyers put any purchases on hold. 

And a controversial report compiled by the Treasury claimed Brexit could knock up to 18 per cent off the value of people’s homes over the next two years, compared to if Britain remained in the EU.

Paul Smith, chief executive of haart estate agents, said: ‘House prices continue to defy the doom-mongers and the doubters again this month, experiencing a very strong end to 2016 – assisted by a wealth of positive news about the performance of the UK economy, but also pushed up by the continuing shortage of stock in the market.’

John Longworth, a prominent Brexit campaigner who was forced to quit his role as head of the British Chambers of Commerce after calling for Britain to leave the EU, added: ‘Contrary to the dire predictions before the referendum, the increase in house prices shows the strength of the economy.

‘But they also they indicate the shortage of housing when we have record migrant numbers.’ 

15th February, 2017: Daily Mail