England is seeing an annualised rate of house price growth of 4.1 per cent and the average property price in Wales increasing by 4.8 per cent.
The Land Registry data is used as an empirical measure of pricing due to the fact that it records every residential transaction in England and Wales.
Therefore, whilst issued later than other house price indices, the report is widely seen by the finance and property industry as the most accurate with regards historic property values.
This latest report suggests that, as other sources of housing data have also indicated, there is a growing picture of regional divergence with the North East and West Midlands seeing the highest levels of growth on a month by month basis, at 3.1 per cent and 2.2 per cent respectively, whilst London suffered from a slide of 2.1 per cent in pricing between January and February, the lowest monthly decline since September 2009 when prices slid 3.2 per cent on the previous month.
Wales saw annual average house price growth in February at 4.8 per cent, although prices fell slightly on the previous month by 0.4 per cent on average.
At a headline level, according to this latest data the average house price in England in February was £225,047 and in Wales stood at £152,891.
But in reality, how helpful is such a ‘rear view mirror’ interpretation of the housing market?
Brian Murphy, Head of Lending for Mortgage Advice Bureau explains, “Land Registry figures provide us with a totally independent ‘whole of the market’ viewpoint, and as such would point to the fact that property market in England and Wales actually performed above market expectations in terms of year on year growth in February.
“Of course, that’s not the case in every region, as the data reflects the steepest month on month fall in sales prices in London for nearly ten years.
“But looking at this latest report holistically, one would suggest that it somewhat underscores the durability of the market as a whole.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, adds “Affordability remains a key barrier to getting onto the housing ladder, so the news of a second consecutive decrease in house price growth will be welcomed by prospective buyers.
“Coupled with Tuesday’s news that mortgage lending for first-time buyers increased to its highest February level since 2007 and with wage growth now outstripping the cost of living, we may see increased buyer confidence and greater housing activity in the coming months.”
However, whilst the rest of England and Wales bask in prices increasing on an annual basis, yet again London languished in the doldrums in February, with sales slumping and prices falling.
The Land Registry data breaks down the change in price by average property type in London and highlights that values for flats experienced the biggest drop in price annually, with an average decrease of 3.4 per cent.
All other types of homes in London saw a modest year on year increase in value, for example the price of detached property rose from £887,959 in February 2017 to £915,162 in February 2018, whilst the average terraced home rose from £482,631 in February 2017 to £489,639 in February 2018.
The likely explanation as to why apartments in the Capital have been the worst performers recently is that many new build blocks have come to fruition over the last twelve months in London, aided by Permitted Development rules which have led to more commercial buildings being converted into residential properties, mainly in the form of flats.
At the same time, an increasing number of investors are divesting their properties – which generally are apartments – due to the changes in taxation on landlords.
Collectively, this means that there are far more flats on the market now than previously, which coupled with an ongoing lower level of buyer activity in London overall, has created a downwards pressure on pricing for apartments than other types of homes.
Nick Leeming, Chairman at Jackson-Stops, also observes on the Capital’s property market, “Throughout 2017 we saw the prime central London housing market inundated with buyers and sellers taking a ‘wait and see’ approach, which had a detrimental effect on the fluidity at the lower to middle ends of the market as well as the top.
“With a lack of significant change made to the punitive stamp duty rules at the top end since then, sellers are becoming fed up with waiting and are instead having to compromise on price to make a sale.”
The Land Registry data supports the latest findings by online agent Emoov, who published their most recent property hotspots index this morning.
Their report is compiled to provide a view of consumer confidence and demand, based on the number of homes sold versus the number on the market for all conurbations in the UK.
According to Emoov’s report, Bristol is the hottest county in England with current buyer demand at 55% in the first quarter of this year, whilst the West Midlands has seen the greatest increase in buyer interest of 36 per cent so far in 2018.
Newport remains the hottest county in Wales with buyer activity at 61 per cent, with Powys enjoying a 34 per cent increase from the last quarter of 2017, the largest in Wales. Glasgow has seen the largest growth in buyer demand in Scotland so far this year at 23 per cent.
In terms of cities, Swindon currently ranks as the hottest conurbation for property with demand surging to 66 per cent so far this year, followed by Glasgow (66 per cent), Newport (61 per cent), Edinburgh (60 per cent) Ely (57 per cent), Gloucester, Ashford, Solihull and Coventry all seeing a 56 per cent increase in activity by purchasers.
Looking to the capital, however, the challenging environment for London vendors continued last month with demand down by 15 per cent in the first quarter of 2018.
CEO of Emoov Russell Quirk, concludes, “There are plenty of pockets across the nation that continue to see strong levels of buyer interest, however, market uncertainty has seen many sellers refrain from selling and in turn, the lack of varied stock has seen buyer demand, in general, remain restricted.”
With estate agents in hotspots across the country hoping that the balmier weather this week might tempt more sellers to list their homes in order to widen choice for active buyers, together with the news that a decrease in inflation may stave off the predicted Bank of England interest rate rise next month, only time will tell if we’ll see a late ‘Spring surge’ with the market warming up too.
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