The average price of a home in the borough increased by more than 10% year on year in the last three months of 2014 and now stands at £235,538. Only two regions in the UK posted higher growth rates.
The latest Residential Commentary Book published by property consultants Bidwells says that Help to Buy, Stamp Duty reforms, planning policy revisions and revised mortgage procedures have all had a marked positive impact on the market.
Despite the forthcoming General Election in May and the temporary diversion this will inevitably provide, the UK economy appears robust and positive from a housing market perspective, it adds.
The Bidwells report says Milton Keynes is an all-round high achiever no matter which measure of economic performance is used.
It has been cited as the fastest growing urban area in terms of population, it also experienced the largest net increase in jobs, the strongest growth in housing supply and the second highest rate of business start-ups between 2004 and 2013, according independent research body Centre for Cities.
Simon Thomas, head of residential development at Bidwells’ Milton Keynes office, said: "With a central location, competitive house prices and confidence-inspiring economic credentials, Milton Keynes offers exciting prospects to buyers looking beyond the more traditional residential markets of the South East.
"As the London residential market becomes increasingly inflated in the face of strong overseas demands, post-recession prosperity, investors and homeowners alike are turning to alternative attractive locations which can offer easy access to the capital without the price burden."
He added: "Milton Keynes is well placed to deliver growth in a resurgent economy, its excellent transport links and convenient location which makes it attractive to a wide range of employers and individuals.
"Developers are positioning themselves to be well placed to capitalise on the opportunities presented by this fast-growing and vibrant town over the years to come."
The report considers recent trends, how the cycle is evolving and the key factors which shape the sector in 2015.
The data reveals that mortgage lending, planning approvals and house price growth generally slowed in the last quarter of 2014, following a frenetic mid-year period.
An increase in supply and a more exacting mortgage market, albeit with record low borrowing rates started to emerge and the market steadied. This suggests a more measured market growth for 2015 which is likely to bring single digit price increases in most markets. Bidwells predicts a 5% average house price growth in the Eastern region this year.
With house price inflation easing and mortgage volumes stabilising, market conditions in 2015 are likely to be more sustainable throughout the Bidwells region. This in turn will create a more stable decision-making environment for buyers, sellers, developers and funders alike.
The context for new development will remain encouraging and the report examines the current housing pipeline and its anticipated direction and impact.
- Above trend economic growth over the next three-four years will support high levels of activity in the housing sector – this will be underscored by a moderate price appreciation in most markets
- The forthcoming General Election will probably slow activity in the middle of the year, but the positive dynamics underpinning the sector are unlikely to alter significantly
- Most markets remain structurally under-supplied – but further increases in development volumes are anticipated, notably in Milton Keynes
- The 2015 forecast for UK GDP is 2.4%
- Price levels have exceeded an average of £465 per square foot in 11 of the 32 London boroughs.
- In Milton Keynes average residential values in the town are circa £240 per square foot, but for central MK the figure is closer to £300 per sq. ft.
- Between 2001 and 2013 MK gained an additional 43,000 residents, equating to an increase of 20.2% – this was in excess of the national average growth of 8.9%
- House price growth for the Eastern region over the five years to the end of 2014 was 23%
- DCLG data shows 112,370 housing completions in the year June 2014 in England; this represents only a 4.1% increase on 2012/13 and is less than half of the estimated annual house requirement of around 240,000 new homes.
- House Price Index – Although growth began to slow in the last quarter of 2014, over the year as a whole prices grew by 8.3% in the Bidwells region (with two thirds of the increase in the first six months of the year)
- In the region new homes prices have risen by 10.6% over 2014 compared to increases in the country house sector, where prices are up by 6%
- In Cambridgeshire, market values in the large country house and townhouse market were down 1.5% in the final months of the year – reflecting the recent Stamp Duty changes
- The regional house price average for homes in Norfolk was up by 4.9%
- In Hertfordshire the average house price was up 7.9%
- In Cambridgeshire it was 9.8%