Annual house prices up 6.4% says Land Registry

Annual house prices up 6.4% says Land Registry

The December data from the Land Registry has shown an annual price increase of 6.4%, taking the average property value in England and Wales to £188,270.

The data revealed that monthly house prices rose by 1.2% since November 2015.

As predicted, London once again experienced the greatest increase in its average property value over 12 months with a movement of 12.4%.

London also experienced the greatest monthly growth with an increase of 2.1%

The average price of property in the capital is £514,097 in comparison with the average for England and Wales of £188,270.
At the other end of the spectrum, the North East saw the lowest annual price growth with an increase of 0.8% and Wales saw the most significant monthly price fall with a decrease of 0.8%.

According to the report, the number of property transactions has decreased over the last year. From July 2014 to October 2014 there was an average of 84,517 sales per month. In the same months a year later, the figure was 80,691.

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments: "Homebuyers in December experienced a notable annual jump in prices, with no glimpse of a slowdown in market activity despite the festive period. However, this growth has not been spread evenly across the country. House prices in London have increased by more than 10 per cent over the year, shooting up to an average of half a million pounds. In contrast, regions like the North East have seen sluggish growth of less than one per cent.

Homeowners in regions with lacklustre price growth will have less to cheer about than those watching the value of their property soar. However, rising prices can be an obstacle for would-be buyers struggling to keep pace as prices sprint ahead.

As house prices in London rise annually by double figures, first-time buyers in the capital have an especially tough market to battle with. The Government’s London Help To Buy scheme is a sorely needed initiative, but presents a temporary solution to a long-term problem. Insufficient property supply will continue to drive up higher prices if not properly addressed.”

Stuart Law, CEO at Assetz for Investors, comments: “Areas in London such as Kensington and Chelsea and Hammersmith and Fulham are continuing to experience particularly low annual house price growth. Reforms to stamp duty at the upper levels is the key driver behind this slowdown which can be seen in the fact that sales transactions in the capital for properties valued at over £1.5 million have fallen on an annual basis. London capital growth is peaking, or indeed has already peaked, in many of these prime central London areas which means that for investors who want their property to work hard for them, London is no longer an attractive prospect.

For buy-to-let investors looking to minimise the impact of the 3% additional stamp duty levy on second homes and investment property, as well as the new tax on mortgage interest, there are now alternatives that need to be looked at. Property prices in areas outside of the capital including Manchester and Liverpool are far from their house price growth peak. For example, in Liverpool and Manchester, it is possible to buy an ‘average’ home for around £100,000 and property price growth is still strong – in December prices were up 6.1% and 5.9% in these cities respectively. As well as this investors can expect very healthy yields of up to 5.7%, which is significantly better than London and able to compensate well for the new mortgage interest tax as it comes in over the next 4 years.”

Peter Rollings, CEO of Marsh & Parsons, comments: “Property values were climbing right up to the wire in 2015, giving homeowners a last-minute confidence boost around Christmas. Buyers also had plenty of reasons to feel positive, following the Chancellor’s Autumn Statement proclamations and the persistence of low mortgage rates. This optimism on both sides of the fence was combining to stimulate activity throughout the housing market.  
London house prices have travelled the farthest distance over the past year, with growth well into double-digit territory fuelled mainly via price rises outside prime central London. But the housing market in the capital has also had some of the biggest obstacles thrown in its way, and so we’re still looking at substantially reduced  price rises in the centre. Compared to a year ago, million pound property sales have slipped back 2% in the capital since stamp duty reform levied higher taxes at the middle and top-end of the property market. Both buyers and sellers at that level are having to be more price sensitive, and adjust their expectations. It remains to be seen how the second wave of stamp duty change targeted at buy-to-let investors may similarly distort the London market – but in the short-term, we’ll see a rush of demand from landlords and second home purchasers in the run up to April, which means heightened competition for first-time buyers.”

Richard Sexton, director of chartered surveyor e.surv, comments: “The figures suggest a slowdown in sales, as the lack of homes on the market starts to impact on property chains. It’s a vicious circle – the lack of listings is dissuading many homeowners from moving, so instead some families may be choosing to renovate and extend properties to suit their changing needs. This further diminishes the choice on offer.

A shortage of homes for sale is particularly difficult for those looking to get onto the ladder for the first time, as the stock of affordable homes shrinks. Incentives to encourage last-time buyers to downsize and free-up family homes, to create more movement in property chains and allow families the options they need may help –  for example, reducing stamp duty fees for those choosing to downsize – would be one way to encourage this.

With demand remaining strong, now is a terrific time for sellers, who are seeing their properties command strong prices. The areas surrounding the capital – in particular the South East and East Anglia – are being lifted by demand patterns rippling out from London, as buyers look to bag more affordable deals outside of the capital. The strong jobs market in areas like Cambridge and Reading is also a honeypot encouraging many to move into these areas.”

Andrew Bridges, managing director of Stirling Ackroyd, comments, “London is once again the star performer of the house price story.  International trends will always have an impact on this global hub, but the capital of the cultural world is shaking off volatility – and once more housing is in the heat of the London spotlights.

This is a positive turn and a sign of voracious demand for homes and offices. Success should be applauded. But London has to make good this opportunity. In a city with a serious shortage of homes, progress will always be tempered with the bittersweet plot of sharpening purchase prices and rising rents.

There are two sides to this story. Rising property prices are lifting balance sheets in Barking faster than they are raising the bar in Richmond. Sellers across the capital are able to get excellent deals when they find the right buyer. But buyers are facing a difficult search and will need to look to new quarters for the next act or their first break.

Future generations of young residents – who will mould the culture and direction of London – may never be able to afford the centre of the city again. So the city centre is moving. London needs to keep working for new homes, to avoid being typecast as an expensive or a static option.”

Nick Leeming, Chairman at Jackson-Stops & Staff, said: “The latest house price data from the Land Registry shows the continuing impact of higher levels of stamp duty on the upper echelons of the property market. The annual fall in sales transactions in the higher price bandings reflects the fact that many people at this level have been deterred from selling up and moving because of the transactional costs; a trend which eventually filters down to the mid-markets, reducing the number of step-up homes available. With the other end of the market, first-time buyers, being stimulated by low interest rates and supportive government policies like Help-to-Buy the overall effect is a stifling one.

Only the oxygen of new homes at all price levels will get the housing market turning over at healthy volumes again. The high level of demand for homes, coupled with limited supply, is driving up prices and we can now see that across 2015 house prices increased by a significant 6.4% – or £11,325 in money terms. All regions of England and Wales saw annual growth in prices in December. This is good news for owner-occupiers who will be seeing their property making them a healthy profit, but is of course less positive for long term affordability.”

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CommercialTrust 30 Jun 2016

This is great news for buyers and investors in a period of significant uncertainty. The 10-year buy-to-let fix at 3.99% in particular is excellent, a clear 100 bps ahead of the nearest competition. Though...

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Lee 30 Jun 2016

Let's see what happens to north-east property prices when Nissan announce they're leaving.

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DmitriKara 29 Jun 2016

I just read another article about eviction rising and this was exactly what was on my mind, Housing has become "cat and mouse"...

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DmitriKara 29 Jun 2016

I am really not surprised. I've seen one too many impudent tenants and in my humble opinion renters have one too many privileges and options to abuse heir landlord in so many ways...

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DmitriKara 29 Jun 2016

There is still so much uncertainty and I will surely step back and see what's happening before I could make any decisions on my end.

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ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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NathanGreen 16 Jun 2016

Seeing that the tenants are quite satisfied with their landlords and the properties is indeed great. I wonder, though, what is the situation in London alone? The tenants face sky-high rent levels in the...

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AndiMur 15 Jun 2016

TheGuardian published the same forecast. But on the other hand, professional brokers express different opinions. According, an exit from the EU would not affect the demand/supply imbalance...

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Gary Holmes
Gary Holmes 14 Jun 2016

Having a professionally completed inventory at check-in and check-out is clearly (to me at least) of minor value. Tenants make un-authorised modifications and/or walk off with items that belong to the

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Violet Gibson
Violet Gibson 14 Jun 2016

Cautious people think buying off-plan is reckless, but over the past few years investors have literally made fortunes.Pre-release prices have obvious benefits for the developer, who gets instant finance...

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Kate Windleton
Kate Windleton 14 Jun 2016

An interesting research indeed. I guess that is in complete contrast with the United States where people often move from one coast to another. It will be interesting to hear the trends for people moving...

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NathanGreen 14 Jun 2016

I think it all depends on the market conditions and how well your company is doing. You will agree that you can't demand more when you're killing yourself just to hang in there. Sometimes you need all

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