Latest house price data ‘comes as no surprise’

Eight regions in England and Wales experienced increases in their average property values over the last 12 months. The region with the highest annual price change is London with an increase of 7.6 per cent. The East experienced the greatest monthly rise with an increase of 1 per cent.  The region with the greatest annual price fall is the North East with a movement of -0.9 per cent.  Yorkshire and the Humber experienced the most significant monthly price decrease with a movement of -1.8 per cent.

The most up-to-date figures available show that during August 2010, the number of completed house sales in England and Wales rose by one per cent to 58,783 from 58,270 in August 2009. The number of properties sold in England and Wales for over £1 million increased by 44 per cent between August 2009 and August 2010, from 506 to 731.

David Newnes, managing director of the LSL estate agency said: “Although homeowners will have hoped for better, sadly, the news from the Land Registry’s House Price Index comes as no surprise.  Mortgage finance remains extremely hard to come by for many would-be purchasers and this has dragged house price growth into negative territory for another month. 
 
“Demand for housing has fallen gradually through 2010, but not as dramatically as might have been expected at the beginning of the year. While the ratio of buyers to sellers has been dropping since March, it has held up remarkably well in the context of an increase in the number of properties coming onto the market.  Despite the fall in average prices, the number of registered buyers rose 0.3% in the quarter between July and October and this should give sellers some cause for cautious optimism.
 
That’s not to say that we can expect a change soon.  Caution among lenders about liquidity are well-founded and going into the New Year the spending cuts will put further downward pressure on prices.  We could see regional disparities widen, with the north likely to be especially hard-hit by austerity measures.  There remains a great deal of uncertainty across the UK   and until there is more confidence in the housing market and generally some more lending to help fuel house sales we are likely to see the market remain at current reduced volumes."

Peter Rollings, managing director of estate agent Marsh & Parsons, said:

“Nationally, the ongoing obstacle of mortgage finance for first-time buyers is still suppressing the housing market and thereby house price growth. In London , the picture is rather different. Central London ’s housing market operates almost independently from the rest of the country and the capital’s housing market is still enjoying a gradual (and therefore healthy) improvement and house prices are still steadily increasing – rising by 0.3% in October. The supply of housing has improved in the last six months, alleviating the shortages that characterised London ’s market a year ago, and drove prices up rapidly. But demand has remained strong. In parts of prime central London , nearly three quarters of purchases are by cash-buyers and so far fewer homebuyers are hampered by the mortgage finance famine that is afflicting the rest of the country.  High end purchases have played a pivotal role in bolstering the market in the Capital, and 39% more properties worth over £1m were sold in August compared to a year ago. With City bonus season on the horizon, and demand remaining robust both from UK and overseas buyers, we anticipate that selling prices (as opposed to merely asking prices) will remain strong and London ’s market will continue to buck the national trend in the approach of Christmas.

Nicholas Leeming, commercial director of Zoopla.co.uk, said:

“This confirms the overall trend we’ve seen over the last few months of a continued reduction of many guide prices. The only region in which prices have increased is London , but the capital operates as a micro market and this rise can be attributed to continued interest from foreign investors. Many of the reductions happening across the rest of the country are coming from sellers keen to move before the festive period kicks in, so some of that pressure on prices will ease in the New Year. But the traditional influx of new properties for sale in early 2011 will reapply pressure to prices if there is not enough demand to support them. The current scarcity of credit, has built up a backlog of buyers ready to fuel demand in the future. While there have been some new entrants to the mortgage market over the last few weeks which will help generate more options for would-be buyers until lending criteria ease further it will be a while before these buyers can help support the market.”

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