Property Wire: Home prices in England and Wales jump 1% in January
Mon 04 Mar 2013
Home prices in England and Wales jump 1% in January, latest house price index shows.
Residential property prices increased by 1% in England and Wales in January taking the average house price to162, 441, the lates figures from the Land Registry show. The annual prices increase is also 1% and London saw the highest price increases in the last 12 months at 7.1%. London also experienced the greatest monthly rise with an increase of 2.5%. The North West of England experienced the greatest annual price fall with a decrease of 4.2% and the most significant monthly price fall with a decrease of 1.9%.
The most up to date figures available show that during November 2012, the number of completed house sales in England and Wales increased by 1% to 61,091 compared with 60, 369 in November 2011. The number of properties sold in England and Wales for over 1 million in November 2012 increased by 19% to 657 from 554 in November 2011. Repossesion volumes, which are included in the monthly house price index for the first time, fell by 11% in November 2012 to 1,589 compared with 1,777 in November 2011.
The only region to see an increase in reposessions was Wales with an annual increase of 21% in November 2012 compared with November 2011. The West Midlands saw prices increase by 1.6% in January compared with Decmber 2012 and also had an annual price increase of 1.1%. The East of England saw a monthly increase of 1.5% and an annual increase of 1.4%.
In the North East there has been a monthly rise of 1.1% but prices are still down 2.2% compared with January 2012 while in the South East price growth has slowed, up to 2.6% on an annual basis but up 1% month on month. In Wales prices have remained stable over the last 12 months, up to 0.9% on an annual basis and up 1% in January compared with December 2012. It is a similiar picture on the South West where prices are up 0.2% year on year and 0.8% month on month.
Prices have fallen consistently in three regions. In Yorkshire and Humber they are down 3.7% year on year and down 0.9% month on month, suggesting the rate of decline is slowing. In the East Midlands prices are down 1.2% year on year and 1.3% month on month. And in the North West they are down 4.2% compared with January 2012 but that decline has slowed to a fall of 1.9% month on month.
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, said that the property market is more buoyant than at any point since the financial crisis. House prices have been rising steadily, repossessions have fallen in 90% on the country, and more first time buyers are getting mortgages. Stronger funding conditions are the driving force behind the improvement. The Bank of Englands Funding for Lending Scheme has pumped cheaper funds into banks balance sheets, allowing them to roll out a raft og cheap mortgages. It has allowed them to offer a wider range of mortgages to a wider pool of borrowers, he explained. He pointed out that the big winners have been high LTV borrowers. If lenders continue in the same vein, 2013 could well be a watershed year, marking the point when the first time buyer market began to recover. Succeed by focussing on those at the bottom tier of the market, with better value mortgages for first time buyers, the housing market will have to spring back into recovery and lift the long term health of the housing market, he added.
The figures confirm that there is a distinct two tier market with London becoming unique in terms of house price growth, according to Peter Rollings, chief executive officer of estate agent Marsh & Parsons who sees this trend continuing. Despite some constraints those who can secure mortgage lending are doing so at historically low rates and the Funding for Lending Scheme is filtering through to first time buyers.
There is optimism in the market place which may not be reflected by some economic commentators who are not at the coal face. Spring is around the corner and we believe it will provide a further positive boost to the thriving London property market, he said. The January figures reflect the fact that the mortgage market is in the best shape it has been in for some time, according to Paul Hunt, managing director of Phoebus Softwware. These UK wide prices, no longer restricted to the capital, although thats obviously still booming, are largely due to improved funding conditions as lenders loosen the purse strings and do their bit for the mortgage market, he said. Borrowers are benefitting from more attractive mortgage deals while falling rates are bringing in more first time buyers too.
As well as giving credit to lenders, we should acknowledge that the Bank of Englands Funding for Lending Scheme has had a big impact. For once, the government seems to be delivering, he added.