The average price paid for a house in England & Wales increased during July by £1,624, or 0.6%, to £270,636. This sets another new record price for the 13th month in succession, according to the latest house price index from LSL Property Services/Acadata.
Excluding Greater London and the South East, where the supply of affordable housing is currently limited, the change in house prices over the month was a more modest £122, or 0.1%, and the average price paid for a home was £86,000 lower at £184,706.
On an annual basis, the average house price has risen by a nominal £24,440, or 9.9%. This percentage increase is the highest annual rise in prices since June 2010, when the market was recovering from the 2007/2009 housing crisis.
The report’s authors anticipate that this rate of growth will begin to slow during the third quarter (Q3 2014), and not least as one then starts to compare current prices with Q3 2013, which was a generally buoyant period in the recent housing market.
Looking at the figures excluding Greater London and the South East, the annual rate of house price inflation in July was 4.6%, which is down from the 5.5% recorded in May 2014.
David Brown, commercial director of LSL Property Services, said: “First-time buyers and buy-to-let landlords are helping the flow of activity in the UK housing market. Overall 90,000 properties were sold across England and Wales in July, up 21% on a year previously and representing the highest monthly total since November 2007. As the common property choice of a new buyer or investor, flats have seen the largest increase in sales during the second quarter of this year, rising a third (36%) compared to Q2 2013.
“As the market emerges from the chrysalis of regulatory change, sales have climbed 10% in the past month. But chequered supply across the country has created considerable regional variation in sales. London and the South East have seen the slowest growth in house sales between Q2 2013 and Q2 2014. In these areas, limited availability of property is impacting sales. Elsewhere, lower prices and the stimulus of Help to Buy are aiding activity. The biggest boost in sales during April-June 2014 was found in the North West and East Midlands, increasing by a third (32%) on the same period last year.
“The average price paid for a home in the capital reached £560,386 in June, following a £10,850 (2.0%) monthly rise. After a temporary waning of growth in the London market, 24 boroughs have set new peak prices, and in Kensington and Chelsea average house prices are on track to surpass the £2million mark. However, a dampening of sales activity and more supply starting to come to the market will help control house price inflation in London.
“Housing policy should not be led astray by what is happening in prime central London. If London and the South East are removed from the equation, the annual change in average houses prices drops by 5.3% to 4.6%. Average prices in Northamptonshire, Bournemouth, and Wiltshire rose in June as the housing recovery starts to spread. The tendrils of recovery may be branching out from the centre, but they haven’t yet unfurled to all corners of the country. Outside of London, the South East and East Midlands, prices dropped and stabilised across all other seven regions in June.
“A more thoughtful and prudent housing market is emerging. Lending is stabilising to sustainable levels, and supply and demand is more balanced. Further interventions or tighter rules could fracture the health of the recovery, particularly further afield where schemes like Help to Buy are a necessary tonic spurring new buyers onto the housing ladder.”
