The latest LSL/Acadametrics England and Wales House Price Index has revealed a marginal fall of £237 or 0.1% in the average price of properties sold in England & Wales during September, as compared with August.
For the fourth month in succession prices have fallen, with May 2012 looking as though it may have been the peak for the year, the report said.
On an annual basis, the rate of growth in house prices peaked in June 2012 at 4.2%, but has been declining since then and stood at 2.2% in September.
London continues to be the main driver of the increase in prices. The annual change in London prices at 8.2% is 3.7 times greater than in any other region, being the only above average rate for England & Wales as a whole.
The LSL Acadametrics Index shows an annual increase of 2.2% in house prices which is higher than that of other house price indices.
“A combination of dipping house prices and falling sales numbers point to a slowing market in September as a lethargic mortgage market and the knock-on impact of reduced buyer activity in August took its toll during the month,” said David Brown, commercial director of LSL Property Services.
“House prices are still in positive territory this year, and have increased on an annual basis for six consecutive months due to a shortage of properties on the market alongside the ongoing appetite from cash buyers and those with substantial equity. However, the rate of increase is slowing.
“It’s clear that the September housing market was still feeling the effects of the distraction of the Olympics in August, with lower activity and reduced competition in the previous month feeding through into a lower number of sales in September. In fact, transactions fell by 24%, compared to a typical seasonal monthly fall of 9%. While we have already started to see buyer activity rebound, the short-term factors hampering September’s performance shouldn’t mask the wider problems the national housing market faces. The lack of lending, especially to first-timer buyers, is choking off first time buyer sales outside of prime London, while uncertainty over job prospects in many parts of the country is still affecting sentiment of many prospective buyers.
“Much hangs on an improvement in the mortgage market. We’ve yet to see enough time elapse to feel a substantial impact from the Funding For Lending scheme in sales prices and numbers, or a boost to activity at the bottom end of the property market. However, lenders are confident that it will lead to increased funding for home buyers, and expect credit availability to increase significantly in the final quarter of the year, according to the Bank of England’s latest Credit Conditions Survey. If this is the case and the cheaper finance reaches those waiting to purchase their first home, it could provide a welcome new impetus for transactional activity, and a new source of optimism for would-be buyers.”
