England's housing market slowdown is "more than seasonal"
Sun 27 Jul 2014
Average house prices in England and Wales have jumped 6.4 per cent in the last year, reaching 172,011 compared to the peak of 181,466 in November 2007. Nonetheless, the country's property market has slowed down, with the June data shows no change in monthly price from May 2014. 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 16.4 per cent. West Midlands experienced the greatest monthly rise with a movement of 1.9 per cent. North East saw the lowest annual price growth with a movement of 0.8 per cent. Yorkshire & The Humber saw the most significant monthly price fall of 1.3 per cent. Peter Rollings, CEO of Marsh & Parsons, comments: "After a frenetic start to the year, the pace of house price growth has slowed this quarter as the market stabilises and returns to more normal trading conditions. With more choice coming onto the market, sellers are able to find their next onward purchase and consider trading up. Calmer conditions in the market have meant buyers view purchasing London Prime property as a less daunting process than has been the case previously. "London house price inflation made headlines all across the world at the start of the year, and this hasnt escaped the attention of canny investors looking for a safe harbour for their capital. But the demographic of investors is changing and contrary to popular belief, the Prime London property market isnt being propped up by overseas money. Were seeing a new wave of UK pension investors looking for steady rental yields and guaranteed long-term capital growth as a nest egg for retirement. Prime London property isnt just bricks and mortar for many its like a global reserve currency or long-term financial safety net. With demand picking up in the lettings market, it is increasingly tempting for people trading up or moving further out of the city to keep hold of existing properties as a buy-to-let investment." "For the majority of us, owning a slice of the real-life Monopoly board will continue to be an aspiration. But there is a property market outside of the world-famous postcodes of Prime Central London and its starting to steal the limelight. As prices in the capital have steadily risen, areas further afield have enjoyed a huge renaissance in popularity. Offering a more affordable range of house prices and a village vibe, Outer Prime London has extended a crucial olive branch for growing families and young professionals taking their first step onto the property ladder." The slowdown in the English and Welsh housing market is "more than seasonal", according to Hometrack. The site's latest index reveals that house prices in England and Wales edged up 0.1 per cent in July 2013, a lower rate of increase than the 0.3 per cent recorded in June 2014 and the lowest growth since February 2013. Prices in London stalled altogether, adds Hometrack, despite the capital's previously booming performance in other indices. Demand dipped too, with new buyers registering with agents falling 0.9 per cent. With less than a quarter of postcode districts registering a price rise in July - almost half that seen in the spring, when half of markets enjoyed price increases - Hometrack's Director of Research, Richard Donnell, says that the slowdown is more than seasonal, with the MMR regulations and increasing caution among buyers both putting the brakes on the housing boom. "Seasonal factors always lead to a slowdown in demand and market activity in the summer months," Donnell comments, "but it is clear that there are bigger forces at work with a pronounced loss of momentum in the London housing market in the last three months. "The lead indicators in the survey have pointed to a slowdown in the rate of growth for the last two months, in part due to warnings from the Bank of England and others of a possible house price bubble. Demand for mortgages has also been slowing for several months now."