December saw the average house price reach £278,997, according to the latest house price index from LSL Property Services and Acadata.
The survey found that London and the South East is holding back house price growth. Values in those regions are cooling, while price growth across other regions remains steady.
Adrian Gill, director of Reeds Rains and Your Move estate agents, said: “There was a brief interlude in the tempo of house price growth in December, with values pausing for breath after a chorus of uninterrupted monthly climbs since May 2013. On a monthly basis, property price inflation peaked last January, and has gently petered out over the course of the past year. This has pruned annual house price growth back to single digit territory again, recording a steadier 9.6% rise in average property values in England and Wales in the year ending December, down from 10.6% recorded in November.
“The recent Christmas chill has emanated from London and the South East. Typically, the South East pocket of the country has been out in front of the pack, but we’re seeing an about-turn. Property values in the capital and surrounding areas are beginning to concede ground after significant advancement over the last year. Average house prices dropped in a third of all London boroughs in the month to November, with Southwark experiencing the sharpest fall in average values of 3.1%.
“Monthly house price growth has continued if the exceptional London and South East regions are excluded from our calculations. Similarly, annual price rises across England and Wales are stable when these regions are omitted, as home values across the rest of the country stand firm and continue forward on their calmer trajectory.
“But it’s not just geography that disrupts the march of house price growth across England and Wales. It is the most expensive properties that are showing the strongest gains in value, while the rate of price growth is slowing among cheaper homes. Properties worth over £250,000 have seen average annual growth of 10.7%. But those valued below £153,000 have typically witnessed a year-on-year price increase of just 2.9%. As the two paths of growth diverge, this is widening the gap between the different rungs of the housing ladder.
“2014 was the year of the first-time buyer, with the second Help to Buy scheme parachuting further assistance to aspiring homeowners throughout the country, and ensured that many potential buyers could still navigate around the stricter mortgage regulations and affordability checks, in the slipstream of higher LTV lending. During 2014 as a whole, completed house sales climbed 18% on 2013 levels – reaching the highest volume witnessed since 2007. While the bulk of this uplift happened in the first half of the year, 2014 finished at a sprint too – with completed house sales in December jumping 17% on the previous month, against the usual seasonal tide, as the Chancellor’s remodelling of the age-old stamp duty barrier flooded the market with buoyed consumer confidence.”
