House price in England and Wales up 6.4% annually, but stalled last month
Sun 27 Jul 2014
Average house prices in England and Wales have seen annual growth of 6.4% but price growth stalled in June, according to the latest flagship Land Registry House Price Index.
There was no change in June compared with the previous month but with the average price of a home now at 172,011, the market is not far off the peak of 181,466 in November 2007. London has seen the greatest increase in its average property value over the last 12 months with a movement of 16.4% and the North East saw the lowest annual price growth with a rise of just 0.8%.
The West Midlands experienced the greatest monthly rise with growth of 1.9% Yorkshire and the Humber saw the most significant monthly price fall of 1.3%. The most up to date figures available show that during April 2014 the number of completed house sales in England and Wales increased by 31% to 66,659 compared with 51,022 in April 2013.
The number of properties sold in England and Wales for over 1 million in April 2014 increased by 39% to 1,028 from 740 in April 2013. The region with the greatest fall in repossession sales in April 2014 was the West Midlands. According to David Brown, commercial director of LSL Property Services, confidence is all about stability and he believes that the property market is delivering that.
We are seeing a shift from a period of catch-up to one of stable price growth and across the country, prices are now rising more uniformly too. All of this will reassure buyers and sellers and encourage more investment in new homes, he said. Certainly, investment is whats required. By contrast, the private rented sector has delivered below inflation rent rises for more than 12 months now, due to extra supply via landlords expanding portfolios. And across all tenures, the affordability of housing will ultimately depend on having enough homes to go around. A healthy purchase market is just the first step towards serious growth, he added.
Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that after a frenetic start to the year, the pace of house price growth has slowed 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, he explained.
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, he said. He also pointed out that there is 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, said Rollings. 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, he commented. The average price of a family home with two or more bedrooms here is less than half that in more central areas, but also offers some of the best capital gains in the long term as high demand fuels some of the most significant house price rises witnessed in London, he added.
Simon Bray, sales director at Hudsons Property in London, said that the appetite for property in prime central London is still strong. 'We have seen twice as many sales during June 2014 compared with June 2013, and May 2014 sales were also up. However, enquiry levels are down 49% since May and historically enquiry levels are down between the two months as we come into the summer holiday period, but this figure has increased this year,' he pointed out. 'This could be the effect of the changes to mortgage lending criteria, threat of interest rate rises and fears of the market over heating. Lower enquiry levels in June are likely to effect the level of transactions for the next couple of months.
Generally a buyer will search intensively for a month and spend the following month short listing properties and making offers to secure a property,' he explained. 'Pricing has been very bullish since the beginning of the year, during June we experienced the highest amount of price reductions since 2008, which reflects the fact buyers are being more cautious and expectations of achievable sale prices are levelling rather than continuing to rise at the rate they have been. We are still achieving record prices for our vendors but the market is not rising at the rate it has been over the past 18 months to two years,' he concluded.