House prices across England and Wales show signs of slowdown
Recent data has revealed that January saw property prices in England and Wales rise by 0.1% following three consecutive month-on-month falls.
According to data from the London Central Portfolio residential index, quarterly prices saw a decrease of 2.8%, with price growth in the new build sector down too, albeit more modestly, by 1%.
The report suggests that weaker sales are the result of an affordability imbalance, with transactions having seen a quarterly decline of 11.3%. Reflecting the downward trend, the new build sector saw sales fall 1.2% on a yearly basis, having fallen consecutively for five months.
However, though the figures indicate that price growth may be weakening, the report highlights that these prices still remain too high for many prospective house hunters. The average home – now standing at £340,937 – is 12.5 times average earnings.
Highlighting the need to address the affordability issues at the heart of the crisis was Naomi Heaton. The Chief Executive Officer at London Central Portfolio highlighted that building more low cost housing would be a step toward this, given that current government schemes are limited in the help they offer to prospective buyers.
‘Despite Government initiatives to support buyers with various schemes, including reductions in basic rate stamp duty and exemptions for some first time buyers, it appears the domestic market is still struggling.
‘Salary caps on mortgage lending, which do not reflect the ratio between house prices and earnings, are hampering buyers, both to get on to the housing ladder and their ability to trade up. This has been exacerbated by the failure to meet affordable housing targets, a trend which shows little sign of reversing.’