House prices in England and Wales continue to rise, albeit at a slowing rate over the last nine months, according to the latest house price index from LSL Property Services and Acadata.
In April 2015, the average price paid for a home was £275,961. This was an increase of £600, or 0.2% over the March figure and gives us the third new peak for house prices this year. At the same time, the 0.2% rise in April 2015 contrasts with the 0.6% rise a year earlier, indicating the quieter market conditions currently being experienced.
On an annual basis, house price growth at the end of April was 5.3%, with the average price of a home being £13,840 higher than a year earlier.
While house prices are still climbing, the annual rate of growth has also halved over the last eight months from 11.1% in August 2014 to 5.3% in April 2015.
In March, London experienced the largest reduction in house price growth of all the regions in England & Wales, to the extent that it is no longer the one with the highest annual house price inflation; that position is now being held by the South East, followed by East Anglia.
It is the first time in the last 53 months that London has not been top of the ‘leader board’ in terms of regional house price growth.
Richard Sexton, director of e.surv chartered surveyors, said: “In the City of Westminster, where the average property is now worth £1,382,965, prices dropped 5.2% during the month of March, as pre-election speculation of a Mansion Tax put a dampener on enthusiasm for the most exclusive London homes. London also saw the sharpest decline in completed home sales between Q1 2015 and the same period a year ago, falling 16.5%.
“Election uncertainty has now vanished, so arguably London’s unique property market could see a fresh boost. But this mansion tax effect is one for the very top of the market. Away from the prime hotspots, affordability is still the biggest factor holding back further price rises – owning a London home is still more of a dream than even an aspiration for millions.
“While property values in the capital have dipped 0.6% month-on-month, prices have still risen steadily in other areas – reaching new records in the South East, East Anglia, and East and West Midlands in March. The headstart that the housing market in London has traditionally exercised over the rest of the UK is retreating, and more of an even playing field is emerging instead. Average property values also hit new highs in Greater Manchester and Birmingham, as demand in other large cities continues to thrive away from the south-eastern extremities of the UK.
“Across the wider market, home sale completions made healthy headway with a 5% uplift in the month to April – in face of what was thought to be a looming political impasse. However, there was a slowdown when we look at the first quarter of 2015 as a whole, with Q1 witnessing a 10% year-on-year drop in the number of homes sold. Activity was certainly more restrained in the months running up to the General Election.
“Yet any past gloom only improves the prospects of a rebound in momentum. Now a clear majority government has been established, confidence has returned to the market with abandon, and buyers across the country can seize the golden opportunities on offer. With the election done and dusted, and demand certainly bolstered by extensions to schemes like Right to Buy, the only major snag in the fabric of the housing market remains the fundamental flaw of a lack of new homes.”