According to the report, on a monthly basis prices actually edged up in January – the first time they have done so following several months of declines. They increased by 0.2% (£455) to leave the average house in England and Wales worth £301,477.
Oliver Blake, Managing Director of Your Move and Reeds Rains estate agents, said: “The slowdown in London can now also be seen in the South East and North East. Time will tell if the rest of England and Wales remains resilient, but the increase in January will be seen by many as positive news and an indication of continued demand. And, with the focus on supporting those entering the property market – including the abolishment of stamp duty for first time buyers - we may see more movement in the market which should bring benefits for all.”
The move into negative territory in annual price growth reflects the continuing struggles of the capital, where prices have been falling for some time. This trend can now be seen in two other regions – the South East and the North East, with average annual prices down 0.2% and 0.7%, respectively.
Nevertheless, it is London, with a 4.3% annual fall, that weighs most heavily on the figures. Excluding London and the South East (but including the North East) prices are up 2.3% over the year. The gap between the annual rate when including and excluding London and the South East, at 2.7%, is now the widest since November 2014.
The South West (up 3.9%) and North West (3.8%) lead the table for growth, with other areas up between 2.3% and 2.6%, apart from Yorks & Humber where prices are up a more modest 1.4% annually.
The fall in average prices of 4.3% annually in London is the biggest seen since August 2009. Prices in the capital are now, on average, £589,553 - £26,742 lower than in January 2017.
The falls are still concentrated in the most expensive boroughs. The top 11 boroughs (of 33) by price are down an average 7% annually. Kensington and Chelsea remains the most expensive borough, with an average price of £1,805,275 in December, but that’s down 12.9%, or more than £200,000, on a year before. Camden (down 10.8%), the City of London (18.2%) and Wandsworth (12.7%) have also seen double-digit drops. Only Haringey (up 3.2%) and Merton (up 13%) in the top 11 have seen rises, but at £636,266 and £619,790, respectively, both have prices only a little above the capital’s average.
The dip is less acute at the lower end of the housing market. The 11 cheapest boroughs have seen a modest fall of 1.3% over the year overall, but more than half (6) are recoding house price inflation, led by Bexley (up 5.5%), which, at £363,746, has the second lowest average house prices in London after Barking and Dagenham, where prices are down 1.4% to £294,659.
Nevertheless, sales at the end of last year indicate momentum might be returning to the top of the market. Hammersmith and Fulham (up 19%), Camden (up 14%) and Haringey (up 13%) saw the biggest increase in transactions in the fourth quarter of 2017.
Nearly three quarters of England and Wales’ 108 unitary authorities outside London were still recording annual price rises in December, with 80 authority areas pushing the overall average up 0.2% over 12 months.
In the South East, Portsmouth is up 7.1% annually, and Brighton and Hove set a new peak price in December (one of 18 local authority areas to do so in the month). And, despite falls in some authorities, including Wrexham, Wales continues to see growth of 2.6% over the year, with strong performance from the likes of Ceredigion (up 7%), Caerphilly (6.7%) and Carmarthenshire (5.9%), as well as Newport (5.1%), which like Cardiff (3.6%) set a new peak price in the month.
Growth in Wales is almost matched by the East of England (up 2.4%), East Midlands (also 2.4%) and West Midlands (2.3%). It’s the North West (3.8%) and, still, the South West (3.9%) that lead the table, though. In the former, Blackburn with Darwen, up by 9.4% on the back of sales of detached houses, has seen the strongest growth anywhere other than Rutland (up 12.1% but on slim transaction volumes), while the key population centres of Merseyside (up 8.2%) and Greater Manchester (2%) both recorded new peak average prices in the month.
In the South West, meanwhile, six out of 15 local authorities recorded a new peak in the month, including Bristol and North Somerset, which have seen some of the strongest annual growth, up 9.1% and 6.7% respectively. Even after this growth, prices in the region remain below the England and Wales average, though, at £285,557.
When it comes to transactions, sales across local authorities in Q4 2017 were up 4% on the same period a year ago, with semi-detached sales up 5%, detached and terraced sales up 4%, and sales of flats down 1%, reflecting the significant decline in buy to let activity.
Peter Williams, Chairman of Acadata and John Tindale, Acadata housing analyst comment:
House Prices January 2018
"2018 starts with annual house price growth falling below zero. In January the rate, when including London and the South East, dropped to -0.4%, the first time it has been negative since March 2012, nearly six years ago. This is the eighth consecutive month in which the annual rate of increase has been declining, and now the dial is in the red zone.
In contrast - looked at on a monthly basis - average house prices in January managed to edge up, but only by £455, or 0.2%, over the previous month. The average price of a home in England & Wales is now £301,477, which is £1,244, or 0.4%, below that seen at the start of 2017. This is still above the £300,000 marker, as it has been for the last thirteen months, although the January 2018 price is some £4,700 lower (1.5%) than the peak average price of £306,184 for a home in England & Wales, which was set in March 2017."
