Liquid error: wrong number of arguments (2 for 1) House prices flatline in June but property advisor tips prices to rise 30% in five years- as regions play catch-up with London | Marsh & Parsons Sales and Lettings Estate Agents London

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House prices flatline in June but property advisor tips prices to rise 30% in five years- as regions play catch-up with London

Sun 27 Jul 2014

House prices in England and Wales remained broadly flat in June with the average property just 24 cheaper compared to May, the monthly index from the Land Registry shows. Its data found the average property value was 172,011 last month, compared to May where prices were slightly higher at 172,035. The index peaked in November 2007 when values hit 181,466. But despite the halt in soaring house prices, in the last 12 months values have still grown 6.4 per cent the Land Registry says - while experts at property firm CBRE believe they will rise 30 per cent by 2019.

The property advisers predict house prices across the UK will catch up with runaway prices in the capital and says values will hit 520,000 in London in five years time and 243,000 in the rest of the UK. Jennet Siebrits, head of residential research at CBRE, said: London has dominated the housing market in recent years and recorded particularly strong house-price growth, but there is now an evident ripple-out effect with increases recorded across all UK regions.

The Land Registry figures are a month older than other house price indices but are based on actual sale prices. They show a lack of monthly growth also affected London, with prices up just 0.1 per cent compared to May. Only two other regions other than London saw any growth. The biggest gainer was the West Midlands with monthly prices up 1.9 per cent, while the South East saw 0.6 per cent smaller growth. Yorkshire and Humber was the region with the biggest falls, with prices down 1.3 per cent compared to May.

Peter Rollings, chief executive of estate agents Marsh & Parsons, said: 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. Despite the small monthly falls, the statistics show house prices have grown by more than 10,000 compared to June 2013 when the average value stood at 161,716. Merthyr Tydfil experienced the strongest monthly growth with an increase of 3.5 per cent, meaning houses now cost 64,647 on average. Both Blaenau Gwent and Torfaen saw the most significant monthly price fall with a movement of -2.1 per cent.

Strict rules introduced by the Mortgage Market Review in April have forced lenders to test how mortgage customers would cope with steep rate rises and this could now be having an effect on house prices. Last month, the Bank of England also unveiled new curbs on the housing market, following concerns about the impact that overheating property prices could potentially have on the economy as it recovers.

Among the new measures, the Bank said that loans of 4.5 times a borrower's income or higher should account for no more than 15 per cent of new mortgages issued by lenders. The summer months are also traditionally slower for house sales as people go on their holidays, while this year there was the early distraction of the football World Cup in Brazil. Separate data from estate agents Your Move and Reed Rains show there were 146,600 first-time buyer transactions between January and June this year, up 27 per cent in the same period last year making it the strongest opening six months in seven years.

The last time the opening half of a year saw more first-time buyer sales was in 2007 (181,500 transactions), before the financial crisis began to bite. But David Newnes, director of the estate agents, said new measures could hit the first-time buyer market hard. He said: The new loan-to-income caps could have a stifling effect on the first-time buyer market. They have understandably been designed to prevent too much "risky" lending to borrowers with smaller deposits, but they need careful interpretation to ensure they do not cut good buyers - with realistic and very affordable borrowing expectations - out of the market. MMR regulations already stress test borrowers ability to withstand a base rate rise. The further regulation could sap the energy at the bottom of the market.

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