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Average house prices stall as rise in sale of £1m-plus properties continues


07-29-2014

 

For-sale signs

Price of average home in England and Wales holds steady at £172,011, down from a peak of £181,466 in November 2007


Katie Allen 

 
www.Guardian.co.uk


These figures are the latest to suggest that recent moves to tighten mortgage lending rules have cooled the property market. Photograph: Yui Mok/PA


House prices stalled across England and Wales last month in the latest sign the property market has come off the boil, but at the top end of the market there has been a sharp rise in the sale of properties over £1m.

Figures from the government's Land Registry indicated that average house price across England and Wales held steady between May and June at £172,011. That is not far off a peak of £181,466 in November 2007. Prices were up 6.4% on a year ago, a slowdown from May's 6.7% annual growth.

The figures from the Land Registry are the latest in a string of reports to suggest recent moves to tighten mortgage lending rules have cooled the property market. Estate agents say that talk of an interest rate hike before the end of the year may also be deterring some potential homebuyers, as well as comments from the governor of the Bank of England Mark Carney that the housing market posed the biggest risk to Britain's economic recovery.

"The heat does appear to have gone out of the property market," said Alexander Gosling at online estate agents Housesimple.co.uk.

"With the mortgage market review, rate rises to come and wage growth still proving negligible, there is every reason to expect more conservative price growth in the months ahead. I think London buyers in particular have reached a point where enough is enough."

Against the backdrop of warnings of a possible price bubble, the Bank's financial policy committee introduced measures last month that could bite if house prices rise more than 20% by early 2017. Those measures followed stricter regulations on home loans coming into force in April under the mortgage market review.

The stagnation in the monthly Land Registry figures was announced as prices fell in seven out of 10 regions in June. As usual, London and the south-east continued to see price rises but it was the west Midlands that saw the fastest monthly growth at 1.9%.

Year on year, London saw the fastest growth with average house prices up 16.4% from June 2013 to £437,608. That contrasted with the north-east, which saw the slowest annual growth at just 0.8% to leave the average house price there at £98,555.

The Land Registry also published its latest figures on completed house sales, which showed a significant rise on a year ago. They were up 31% to 66,659 during April. The number of properties sold for more than £1m jumped 39% in a year to 1,028 in April. Repossessions fell 30% on the year to 898 in April.

The numbers follow a report on Monday from lender Halifax that suggested rising house prices, the prospect of higher interest rates, and difficulty in raising a deposit are rapidly putting people off buying a house.

Its poll identified a sharp drop in the number of people who felt that it would be a good time to buy a house over the next 12 months – to a balance of +5% in the second quarter, from +34% in the first quarter.

www.theguardian.com/

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