Liquid error: wrong number of arguments (2 for 1) May data reveals 6.7% annual house price rise | Marsh & Parsons Sales and Lettings Estate Agents London

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May data reveals 6.7% annual house price rise

Thu 26 Jun 2014

The May data from Land Registry's House Price Index shows an annual price increase of 6.7% taking the property value in England and Wales to an average price of 172,035 - As usual however, prices in the capital are rising well above the national average ... The monthly change from April to May shows an increase of 0.4%. Repossession volumes decreased by 37% in March 2014 to 987 compared with 1,560 in March 2013.

The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 18.5%, which also experienced the greatest monthly rise with a movement of 2.5%. North East saw the lowest annual price growth with a movement of 0.9%, while Yorkshire & The Humber saw the most significant monthly price fall of 0.9%.

The most up-to-date figures available show that during March 2014 the number of completed house sales in England & Wales increased by 16% to 63,587 compared with 54,708 in March 2013. The number of properties sold in England and Wales for over 1 million in March 2014 increased by 28% to 840 from 657 in March 2013. The region with the greatest fall in repossession sales in March 2014 was the East Midlands.

Brian Murphy , Head of Lending at Mortgage Advice Bureau (MAB), comments: "The latest Land Registry data again shows London house prices far ahead of the curve, with no other region across England and Wales even approaching double-digit growth. The fact that exactly half have recorded a monthly fall in the average house price shows that property values remain safely under control across much of the country. Prices appear stable across much of the Midlands and the North, which will give renewed hope to first time buyers that buying property is still a realistic ambition. Many of the sales using Help to Buy equity loans and mortgage guarantees have been focused in these regions, allowing better access to mortgage finance without pushing house prices further out of reach.

London remains a unique case in need of special measures and Londoners will be the first to see the effect of moves by the Bank of England to ration high loan to income (LTI) mortgages - unless, of course, they are among the cash buyers, foreign owners and buy-to-let landlords who do not rely on mortgage finance but are still a major influence on rising prices. It is encouraging that the Bank is still willing to allow a limited supply of high LTI mortgages, which are needed in some circumstances and are safely covered by rigorous affordability checks. To balance the equation, we now need to remove the shackles from builders and developers so that housing supply can catch up."

Nicholas Ayre , managing director of buying agency Home Fusion, says:

"The London market powers onwards, according to the Land Registry, with double-digit growth. But agents suggest that sentiment is changing as buyers are taking more time to consider a purchase before taking the plunge. Mark Carney has made it clear that interest rates will go up sooner rather than later so buyers are rightly asking whether they can they afford the property now and also in a year's time when rates could be higher.

Even a 0.25 percentage point rise will make a difference: it may not sound like much but that's a 50% jump from where we are now so it needs to be taken seriously. Buyers are taking heed of the warnings. Any good property will still march out the door but anything unusual will take longer to sell."

Peter Rollings , CEO of Marsh & Parsons, said:

"After one of the busiest starts to the year we've ever experienced, price growth is beginning to slow, as a fresh supply of property comes onto the market to counter the imbalance with demand. The latest Land Registry House Price Index shows the average house price in England and Wales now stands at 172,035, down from 172,069 in April, demonstrating the self-regulatory nature of the market as it returns to normal.

Not only does this give buyers' some breathing space from the fierce competition experienced earlier this year - it is also good news for sellers who now have more choice for their onward purchase. London, where property is still in much higher demand, continues to be in a league of its own and unrepresentative of the UK market as a whole. However, the figures for April show a natural levelling off of the market with a monthly price increase of 2.5 per cent compared with 4.2 per cent in April, dispelling rumours of a housing bubble in the capital."

Jeremy Duncombe, Director, at Legal & General Mortgage Club, comments:

"Fears of a house price bubble continue to dominate the news agenda. Worries about London and the South-East seem to be causing policymakers to seriously consider intervention. However, while measures that encourage sensible lending are always a good thing it must be remembered that the UK housing market extends far beyond the capital and its environs. Any far reaching changes do run the risk of putting a halt to recovery in other areas of the country and nurturing that is just as big a concern as the London and south east market overheating. The only way that we can build a sustainable and balanced housing market is by building more homes and all efforts must be made to get builders building."

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