Login  |  Signup   Connect with us  

House prices remained subdued in April despite record low interest rates and high employment levels says House Price Index from LSL Property Services/Acadata

House prices remained subdued in April, rising just 0.1% for the second month in succession, according to the latest House Price Index from LSL Property Services/Acadata.

Despite record low interest rates and high employment levels, prices have increased just 0.5% in the last quarter with the average house in England and Wales now worth £301,606.

 

The General Election call in April had little effect on monthly figures, with decisions to buy and sell taken well before. The outcome, though, may affect the market further down the line, says the Index.

 

Nevertheless, annual price increases remain steady, rising slightly to 3.5%. Estimated transactions of 63,500, while down 7% on March, remain in line with levels seen in 2015.

 

“Real transformation is needed to address the housing supply shortage,” said Oliver Blake, managing director of Your Move and Reeds Rains estate agents.

 

“Recent reports from House of Commons committees have made a strong case for the government to do more. As manifestos are published ahead of the upcoming election, we hope there is commitment to bridging the gap between supply and demand which will stimulate more market activity, stability and enable more people to secure their dream home.”

 

Ninety of the 108 unitary authority areas in England and Wales (83%) saw prices rise in the last year, led by Buckinghamshire (up 12.1%) in the South East, Ceredigion (10.4%) in Wales, and Shropshire in the West Midlands (10%). The monthly increase remains modest at 0.1%, however.

 

Detached properties are the most popular property type in Buckinghamshire with prices rising from an average of £700,000 in March 2016 to £780,000 one year later, assisted in part by several new build developments in the Aylesbury, High Wycombe and Gerrards Cross areas.

 

The West Midlands tops the regional table for growth for the second month in succession, up 6.2%, helped not just by strong growth in Shropshire, but also the West Midlands metropolitan county (up 9.4%), Telford & Wrekin (7.6%) and Herefordshire (7%). The surge in the West Midlands has pushed the East of England, which led growth for much of last year, into second place.

 

The East remains strong, though, growing 4.9% annually, and matching the West Midlands’ 0.5% monthly gain. It was also the only region to see no authorities reporting price falls over the year, while six of its 10 authorities saw new peak prices in the month, the same number as the West Midlands.

 

Outside these regions and London, the East Midlands is keeping pace, up 4.3%; Wales and the North West (up 2.3% and 3.3%, respectively) follow; and Yorks & Humber and the North East (1.8% and 0.1%) continue to lag behind.

 

In terms of transactions, it’s Newport in South Wales that has seen the biggest increase in volumes between Q1 2015 and Q1 2017. Sales are up 54% (an additional 190 homes) over the period, bolstered by new developments in the city, while prices have grown 5.4% annually.

 

By contrast, prices are flat and sales down by a quarter (24%) since 2015 in West Berkshire, in the South East: a victim of its concentration of detached and semi-detached homes appealing mostly to movers in a market dominated by first time buyers.

 

Prices in Greater London fell 0.1% in March, decreasing £750 to £610,418, but were up 1.4% annually. The slowdown in London is illustrated starkly when that’s compared to the 12 months leading to March 2016, when prices rose 13.6%. Although the surge seen in 2016 was caused by a rush to buy ahead of Stamp Duty changes, London prices have slowed significantly and the Capital is now the region with the second lowest house price growth in England and Wales.

 

Despite signs of a recovery in early 2017, it is high-priced property that continues to struggle, with more affordable areas seeing the strongest growth.

 

Ranked by price, the bottom third of London’s boroughs had a weighted average increase in prices over the year of 4.0%; the top eleven boroughs saw an annual increase of only 0.3%.

 

Among the cheapest 11 boroughs, meanwhile, only Greenwich and Sutton have seen prices fall in the 12 months to March, by 0.3% and 0.7% respectively. Of the top 11, seven are down on an annual basis.

 

There are exceptions. Haringey, where average prices are £656,713, is up 15.6% annually. That’s double the 7.8% increase in Havering, the third fastest growing borough and among the cheapest in London, with prices of £380,162.

 

Haringey includes some parts of Highgate, Muswell Hill and Crouch End, which are among the most prosperous areas in the country. The biggest falls over the year, meanwhile, were in Merton, down 6.4% over the year, and Hammersmith and Fulham, down 6%.

 

More generally, sales are down a third (32%) on the first quarter last year and remain significantly affected by the introduction in April 2015 of higher stamp duty rates on properties costing more than £925,000. Volumes in Kensington and Chelsea, the most expensive borough in London, have fallen by 37% between Q1 2015 and Q1 2017.

 

Havering, one of the lowest-priced boroughs meanwhile, has seen among the smallest reduction in sales volumes over the same period.

Share this story: 

Add new comment

Latest #ukhousing Tweets

Ecodan for New Build Applications