Property News Global: Has a property market slowdown begun?
Sat 01 Nov 2014
Prices in the capital slipped 0.7% last month - first drop for nearly a year. Only three regions had monthly growth- the East, South West and Wales average house value is now 177,299, data shows.
House prices dipped in seven of 10 regionis in England and Wales last month adding further evidence stem is starting to run out of the market.
Prices nudged back 0.2% in September bringing the average house value to 177,299. according to the Land Registry figures.
Significantly, property prices in London fell 0.7%, the first montly fall experienced in the capital for nearly a year. It came off the back of a 2.4 percent increase in August and 2.6 percent in July.
Clear gains: Annually, prices in the South East and London have grown far faster than elsewhere.
Yorkshire and Humber saw the biggest monthly falls of 2.2%, followed by the West Midlands at 1.3%.
Only monthly prices in the East, South West and Wales were slightly higher, the figures - which lag one month behind other indices - show.
More specifically, Redcar and Cleveland experienced the strongest monthly growth with an increase of 2.8%. Blaenau Gwent saw the most significant monthly price fall with a drop of 5.8%.
House prices are up 18.4% annually in London, considerably higher than any other region, the next nearest being the East at 10.9%. It means that the average price in the capital is 460,521, more than double the national average. But despite this, there are clear signs of a slowdown in London. Peter Rollings , chief of Marsh & Parsons, says price falls in the capital could be a result of mansion tax worries.
'London's economy thrives on its global standing as an unbeatable destination both to live and to do business and talk of a mansion tax and other populist wealth taxes threatens to erode this reputation. A quarter of all Prime London property purchases are made by overseas buyers, though the vast majority have chosen to live and work here, adding hugely to the strength and vibrancy of the London economy. The uncertainty surrounding these proposals could shake the foundations of London's property market as the political rhetoric picks up ahead of May's general election, and we'd enter dangerous territory which could filter down to all sections of the market if these buyers packed up and turned their attentions elsewhere.'
The Land Registry said the number of property transactions has increased over the past year. From April 2013, to July 2013 there was an average of 64,317 sales per month. In the same months this year, the figure has reached 75,950.
Last week, a report by property website Rightmove tipped Brighton, Southampton and Luton as the three hottest future house price locations for the next five years, after saying prices are now rising faster in the South East than London.
This has been the result of a ripple effect occurring as cash-rich Londoners move out of the capital and buyers seek better value for their money and more affordable properties. Howard Archer, chief economist at IHS Global Insight, said: 'With housing market activity clearly off its early-2014 highs, we suspect house prices will generally rise at a more restrained rate over the coming months. Specifically, we expect house prices to rise by around 1% quarter-on-quarter in the fourth quarter of 2014. We see house prices rising by around 5% in 2015.'