House prices down 0.8% in March says Land Registry
Wed 29 Apr 2015
The latest Land Registry house price index has shown a monthly average price dip of 0.8%.
The new data revealed an annual price increase of 5.3%, which takes the average property value in England and Wales to 178,007 compared with the peak of 181,049 in November 2007.
Regionally, London experienced the greatest increase in its average property value over the last 12 months with a movement of 11.3%, while the North East saw the only annual price fall with a decrease of 2.9%.
The North East also saw the largest monthly price decrease with a fall of 4%.
The number of completed house sales in England & Wales decreased by 18% to 53,168 compared with 65,175 in January 2014. The number of properties sold in England and Wales for over 1 million also decreased by 19% to 851 from 1,049 a year earlier.
Peter Rollings , CEO of Marsh & Parsons, comments: First-time buyers have been riding a wave of fortuitous circumstances recently with almost unheard of mortgage rates, reduced up-front stamp duty costs, and support schemes like the Help to Buy ISA inflating confidence. Combined with a more accessible pace of property price growth so far in 2015, many more have been able to take the plunge into the property market. Our latest research found that first-time buyers accounted for 28% of Prime London house purchases during Q1 2015. Prime London property has always been a bastion of investment, but its encouraging to see the drawbridge being lowered for everyday Londoners who live and work in this city. With more and more young professionals climbing onto the property ladder, one-bedroom properties have outperformed the market across Prime London.
Historically, buyers rated property on the number of bedrooms and a check list of desirable features. But the speed at which the London property market has moved in recent years has shifted the goalposts. Todays Londoners are far more likely to prioritise location, overall square footage and well-thought through living space compromising on that second bedroom accordingly. For the same reason, savvy investors who find the right one-bedroom property have the golden ticket to rental returns.
Jeremy Duncombe , Director, Legal & General Mortgage Club, said: Activity in the housing market over the first quarter of the year has failed to reach the levels predicted at the start of the year. This has contributed to the fall in the rate of house price growth reported in the Land Registry figures today. However, despite this slow start, activity in the market is likely to pick up over the coming months as uncertainty around the election result is resolved. In addition, continuing low interest rates mean that now is a good time for those coming to the end of a mortgage deal to look for a new rate."
Brian Murphy , Head of Lending at Mortgage Advice Bureau (MAB), comments: The expectation was that pre-election jitters would put a dampener on the housing market, yet recent house price indices suggest growth has remained consistently positive. Figures from the Land Registry demonstrate 5.3% annual house price growth in March, while Nationwide puts this at 5.2% for April. Its not yet clear what the impact of a new government will be, but there is certainly plenty of resilience in the market at the moment.
Consumer demand is high, bolstered by stamp duty changes and record low mortgage rates. Lenders have a hearty appetite for business, and its generally expected that housing activity will remain strong as the year progresses. Its too soon to speculate exactly what policies will be in place following Mays polling date, but recent announcements suggest there could be further plans that work in potential buyers favour.
Strong house price growth is indicative of a healthy market, but annual growth has moderated in comparison to last year, which will be welcomed by those with smaller budgets. However, the imbalance between housing supply and demand continues to be a cause for concern, and could push house prices to levels that leave low-income borrowers locked out of the property market.
Mark Harris , chief executive of mortgage broker SPF Private Clients, commented: "While the latest Nationwide and Halifax house price indices indicated positive momentum in the housing market, the Land Registry records a decline in prices in March, suggesting the picture is rather more complex."
The Land Registry points to a decrease in the number of property transactions over the past year and there is a shortage of homes coming onto the market.
The national average masks significant regional variations. House prices in London rose by 0.2% in March, with double-digit annual growth of 11.3% - more than twice the national average of 5.3%. While the luxury end of the London market may have come to a halt because of uncertainty surrounding the General Election, it is business as usual for the mainstream market. This has been fuelled by cheap mortgage rates, which look set to continue with lenders demonstrating a real appetite to lend. This will further support mainstream house prices as buyers take advantage of rates that are at their lowest in a generation."
Guy Meacock , head of the London office for buying agency Prime Purchase, added: "Despite last months decline in prices, housing activity is likely to pick up during the course of this year.
There is panic in the housing market as a result of the culmination of many different tax changes coming together. A possible mansion tax and fear of the unknown is playing a big part, although the recent stamp duty changes arguably have had a much bigger impact on the top end of the market. A Labour/SNP coalition will soften the market but in terms of buying now it is still a good time as there is less competition and more room for negotiation."