House prices hit fresh record high in September, the latest LSL Property Services/Acadametrics House Price Index for England & Wales has revealed.
The index reported that prices were £8,526 higher than one year ago, and up by £1,127 compared to a month ago.
Dr Peter Williams, chairman of Acadametrics, said: “This month the South East region joins Greater London – and England & Wales as a whole – in setting a new record house price. At £278,620, average prices in the region are now £1,000 higher than the previous peak set in February 2008, and before the recent mortgage credit squeeze took its toll.
“A full recovery in prices has only been seen in Greater London and the South East, with East Anglia likely to be next.”
On a monthly basis, the average house price in September in England & Wales as a whole increased by 0.5%, or £1,127. Over the last 12 months the average house price has increased on eleven occasions, with only May 2013 seeing a minor fall. This is a common enough occurrence; over the period March 1996 – April 2005 there were 110 months in succession in which house prices rose.
David Brown, commercial director of LSL Property Services, added: “2013 will be remembered as the year first-time buyers returned to the market. Up until this year the market was still in trouble thanks to the financial crisis. It was a long way from recovery. What a difference six months makes. In that time we’ve seen banks ease criteria on mortgages for people with small deposits, which has opened the door to new buyers who have spent years on the outside looking in. More people are in work. Inflation has begun to ease. And clearer forward guidance on interest rates has brought more certainty and confidence.
“The return of the first-time buyer has triggered a ripple of activity all the way up the housing ladder. It is starting to unclog the blockage at the bottom end of the market, which is helping make the whole system more fluid. Demand has increased significantly in a short space of time, and raced ahead of the supply of homes, which is causing house prices to rise. Think of it as shaking up a can of coke. When it is opened, you get the fizz, froth and overflow. Then it flattens out again. That’s what we’re seeing with the housing market. Demand has been bottled up by a lack of mortgage finance, but now mortgages have been made more accessible the backlog of buyers has spilled onto the market after years of frustration, scrimping and saving.
“But this is still only a fledgling recovery. First-time buyer numbers are still some way short of their historic levels. It is not a ‘boom’. Or a ‘bubble’. It is a market correction, albeit a fairly quick one. The only ‘boom’ is the loud noises coming from alarmists and sensationalists warning about a return to the bad old days of the 2000s. We’re not even close to that. There is no sub-prime mortgage lending, no lending above 95% LTV. Credit checks are tough, rates are fairly high on high LTV mortgages, and lenders now carry out stringent affordability checks for every single mortgage.”