Average property prices in England and Wales up 6.7% compared to a year ago

The average property value in England and Wales increased by 1.5% from March to April and annually prices are up 6.7%, according to the latest data from the Land Registry.

This takes the average house price in England and Wales to £172,069, compared with a peak of £181,572 in November 2007.

London experienced the highest annual increase in average property value with a movement of 17% while the North East experienced the only annual price fall of 2.9%.

London also saw the greatest monthly price rise with values up 4.2% and again it was the North East with the only monthly price fall, with prices down 1.9%.

The data also shows that the number of property transactions has increased over the last year. From November 2012 to February 2013 there was an average of 52,331 sales per month. In the same months a year later, the figure was 72,080.

The figures back up evidence that 2014 has seen one of the busiest starts to the year for the real estate market, according to Peter Rollings, chief executive officer of March & Parsons. He pointed out that limited housing stock and fierce competition for available properties means that in many parts of the country buyers are left with very little breathing space.

‘House price rises may have grabbed the headlines this year but double digit annual increases are not sustainable, and as the market self regulates itself, sellers and estate agents need to adjust their price expectations accordingly,’ he said.

He explained that it is a good sign that in the past six weeks the market has been steadier and prices have plateaued as more property has come onto the market. However demand continues to outweigh supply, in what is still a seller’s market.

This renaissance of supply is offering buyers more choice than they’ve enjoyed in recent months and is also good news for sellers searching for their onward purchase. That said, sellers should be prepared to adapt to these cooling conditions,’ he said.

‘We believe this slowdown in price growth is a healthy and organic development and would urge the government and Bank of England to allow the market to take its natural course. Ramping up interest rates or making mortgages more expensive would be a gross over reaction, which could harm the wider market outside of the capital, where the story is very different and recovery is only beginning to take shape,’ he added.

The figures show that the recovery has spread across most of the country, according to David Newnes, director of Your Move and Reeds Rains owned by LSL Property Services. He believes that the government’s flagship Help to Buy schemes have been instrumental with the impact felt most strongly in the North West and East, areas where the recovery is still taking hold and there are still lower cost properties to be found.

‘The scheme has assisted thousands of first time buyers realise their dreams of home ownership, but has also injected greater movement into the market as a whole. An increase in sales from the bottom has come in tandem with growing consumer confidence. It has also blazed the trail for higher LTV lending and boosted the wider choice available on the market for borrowers with smaller deposits,’ he explained.

‘The recent Mortgage Market Review has seen in a transition for the borrowing landscape, aimed at ensuring lending remains sustainable and responsible. While this new lending criteria beds in it is difficult to tell its full future impact,’ he added.

‘However, the lack of available housing stock remains a constraining issue and supply needs to keep pace with demand to make sure that properties prices do not slip out of reach of buyers limits. Currently house price growth across most regions outside London is broadly sustainable and this has to be maintained for a healthy housing market,’ he concluded.

Tony Bennett, managing director of Platinum Property Partners (PPP), has concerns that while the housing market is clearly moving from strength to strength, the flipside to accelerating house prices is the property ladder inching further away from the grasp of aspiring buyers.

‘Help to Buy scheme has galvanised some new buyers, and for these the support has been vital. But with less than 7,500 homes sold under the scheme's second phase, it is just a fraction of the total across the UK. As more and more are locked out of the market, the demand in the rented sector will only intensify. Not only will it be a case of landlords widening the pool of rental homes, but also ensuring these are both affordable and to a high standard,’ he pointed out.

‘For landlords, rising house prices represent a welcome uplift in capital values. However, particularly in a fluctuating market, we urge buy to let investors to pay attention to the income potential of their properties as well as capital growth. PPP’s latest research found that only a third of landlords invest in property with the aim of generating an income now, but the two must go hand in hand to maximise the return from any buy to let investment,’ he added.

The government needs to look beyond London to see an accurate reflection of activity in the property market as the London bubble continues to distort the market outside the capital, according to Nick Leeming, chairman of national upmarket estate agents Jackson-Stops & Staff.

According to directors of the firm’s 42 offices nationwide, the hype surrounding the London market is leading some vendors in the country to demand unrealistic prices for their properties, with the result that little interest is shown until prices are reduced to a more realistic level.

‘It is time that politicians and commentators looked outside London to see the reality in the property market. There is no bubble outside London is the consistent message from many of our offices in places like Chichester, Northampton and Dorset. Sales in the middle market from £350,000 to £900,000 are encouraging but properties over £1 million are taking months to sell,’ said Leeming.

The firm’s Norwich office reports that property in Norwich and the North Norfolk coast is selling well but there is little sign of London money coming into the £1 million plus bracket and that is reflected across many of its offices. According to the Shaftesbury office, with values in London still increasing at 10 to 15% per annum, there isn’t much incentive to move out just yet.

Ironically, the country now offers better value than ever, based on historical price comparisons, the firm has found, but the buying process also remains sluggish, with its office in Northampton reporting that mortgage applications are painfully slow and taking up to 10 weeks before a mortgage survey is carried out.

‘The government and other bodies should look well beyond London before considering whether the UK property market requires any form of control, as otherwise they risk removing the oxygen that sustains a more balanced market in the country,’ added Leeming

Culled from www.propertywire.com