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In many regions in England and Wales average property prices have yet to reach levels before the economic downturn and price growth is slowing, the latest index shows. House prices increased by just 0.5% in September, taking the average price to £275,820, the smallest monthly increase this year, according to the LSL house price index. On an annual basis prices are up 10.6% but when London and the South East is excluded from the calculation prices are up just 4.5% and overall prices are up just 2% a year since the crisis. For six regions of the UK, average property prices achieved on completion are yet to match their pre-crisis score and a North/South divide in the remains evident. The North has the furthest ground to travel, with average prices still 8.3%, or £13,400, below their housing boom high in March 2008. However, average house prices on sales completion in the South West set a new record in August, surpassing their October 2007 peak for the first time. This makes it the fourth region after London, the South East and East Anglia to scramble out from under the shadow of the financial crisis. Areas further afield like Warwickshire, Northamptonshire, and York are breaking cover too, with prices also towering to new heights. David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that the London property scene is on a different scale to the rest of the country. Overall, the capital has seen the strongest housing market recovery, with prices having now grown 47.3% from their previous peak in February 2008. However, the rate of annual house price inflation in the capital eased off by 0.1% in August, as we see growth relaxing into a slower tempo from the heady pulse earlier this year. ‘Across all of England and Wales, house prices have risen on average by 2% every year in the aftermath of 2007/2008 housing boom and bust. But this growth falls short of the 2.8% annual increase in CPIH over the same period meaning it is only home owners in London who have seen their properties climb in value in real tangible terms,’ said Newnes. ‘September saw the lowest monthly increase in property prices in 2014 so far, as a new spell of market adjustment sets in for the autumn. But while price growth dulls, activity in the market is still vibrant, and total house sales completions are up 16% year on year in September,’ he explained. ‘First time buyers have been bringing much of the vitality and optimism to the party. Over the three months from June to August, the sale of flats, typically the preserve of new buyers making their inaugural property purchase, has risen 26% when compared to the same period in 2013,’ he pointed out. ‘While the market adapts to a mellower beat, schemes like Help to Buy and an accessible lending environment are essential to ensure that confidence isn’t silenced, and activity continues to sing,’ he added. Continue reading →
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