Average prices in England and Wales up 1.7% last month
Thu 28 Aug 2014
Average house prices in England and Wales increased 1.7% last month compared with June to reach 175,653,according to the latest official data from the Land Registry.Annual price growth was 7.2% in July and it means that prices are less than 10,000 below the peak of 181,442in November 2007.The region in England and Wales which experienced the greatest increase in its average property value over thelast 12 months was London with a rise of 19.3% and London also experienced the greatest monthly rise of 3.3%.The North East saw the lowest annual price growth with at 2% while Yorkshire and The Humber saw the mostsignificant monthly price fall of 0.6%.The most up to date figures available show that during May 2014 the number of completed house sales inEngland and Wales increased by 10% to 72,900 compared with 66,325 in May 2013.The data also shows that the number of properties sold in England and Wales for over 1 million in May 2014increased by 32% to 1,032 from 779 in May 2013.According to David Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL PropertyServices, price growth has stabilised as more housing stock becomes available and also in the wake of tighterlending regulation introduced earlier in the year.There is still a lot of ground to make up in the volume of sales happening, House prices have stabilised in manyregions and have still not matched the heights reached before the crisis. London may routinely grab theheadlines, but Help to Buy and higher available LTV lending are indispensable in parts of the country whererecovery remains subdued, he pointed out.Peter Rollings, chief executive of Marsh & Parsons, believes that the starkly different figures for London shouldnot cause concern. London has always been an anomaly, a few steps ahead of the curve, and while the London market is now stabilising following a whirlwind few months of growth, parts of the UK are still waiting for thehousing market recovery to ramp up, he said.He also pointed out that after months of talks of a housing shortage, particularly in London, supply levels aremaking a comeback. In the current calmer climate, sellers are emboldened to take their next step up the ladderand put their homes on the market, which is refreshing the choice available to buyers and relaxing thecompetition. This will spur on sales, but also ease house price rises to healthy and attainable levels, sustainingsteady upwards growth for the remainder of the year, he added.Duncan Kreeger, director of lender West One Loans, pointed out that prices are rising fastest where there arejobs and the economic recovery is taking hold most strongly. The urgent next step will be for supply to catch up.Everyone knows we need to get more homes onto the market, but the real squeeze is even sharper in Britainscentres of employment, he said.From London to Aberdeen or the East Midlands, the fire of economic growth needs homes for a growingworkforce and if that isnt tackled well all be poorer as a result, he explained and added that its clear a lack of supply is making the property market more volatile. More up to date figures show that going into the autumn prices are cooling significantly. What we need is a more effective and more sustainable property market that can supply the volume of homes we all need. But that market would also support steadier and gradual house price growth, he said. Developers are scrambling to keep up and more imaginative planning rules are proving useful too. But finance is the real bottleneck, restraining the number of new sites. Lenders need to play their part in all this, and support the conversions and ground-up projects alike that can get more people moving into their new home, he added. According to Nick Leeming, chairman of national estate agents Jackson-Stops & Staff, London is clearly still the engine room driving the property market, with international buyers continuing to want to invest in the capital as a base. The intelligence from our 44 offices nationwide is that the ripples from the capital are making a difference in some areas, particularly those within commuting distance of the capital. However, we must remember that there are two distinct markets here and any likely rise in interest rates should take into account the regional variations in the strength of their recovery, he said.