The report also highlighted that property transaction numbers were up over the course of the last year. Between July and October there were 82,067 sales, an increase of around 7,000 in a year-on-year comparison.
The capital saw an average monthly increase of 1.8%, taking the annual change to 16.3%. These increases now show that the average price for a property in London is £464,936, dwarfing the national average by £287,170.
Staying in the capital, Waltham Forest claimed top spot for the highest annual change, a highly impressive 25.1%. Newham saw the highest increase on a monthly basis, gaining 1.6% to the average value of its property.
In contrast, the highly desirable areas of Kensington and Chelsea saw the lowest annual growth of 11.5%.
In other regions, the North West saw the lowest annual price growth with a movement of 1.5% and also saw the largest monthly decrease with a fall of 1.6%.
The number of properties sold in England and Wales for over £1 million in October 2014 increased by 15% to 1,132 from 984 in October 2013.
Adrian Gill, director of Reeds Rains and Your Move estate agents, comments: “House price growth has ploughed forward solidly to the very end of 2014, although it has lost some steam since the spurt of steeper rises experienced over the course of last year. The real variation is in how growth is spread so unevenly across the country, and in many regions property prices are stuck in a rut – or even sliding backwards.
But December is the close of one chapter, and shouldn’t be viewed as a prologue to the coming year. Aspiring buyers are equipped with all the tools they need to climb onto the housing ladder and secure great deals on homes. Demand at the bottom of the market continues to thrive under the careful watch of Help to Buy and high LTV lending, and stricter mortgage criteria haven’t gnawed away at consumer confidence. In fact, record low interest rates are sowing the seeds for generous long-term mortgage fixes, and stamp duty has been broken down to more manageable levels. With these favourable conditions in place, the time is ripe to buy, and this should cultivate further healthy sales momentum in 2015.”
Mark Riddick, Chairman of Search Acumen, said: “Today’s figures show a tumultuous year for the UK housing market ended with prices still on the rise. The slight cooling of growth in the second half of 2014 will have encouraged more buyers to market, and transactions in the four months to October were up 9% year-on-year.
December often brings a seasonal stupor in property activity, but these figures suggest the market has weathered a potential storm following changes to mortgage criteria. Stamp duty reform has only scratched the surface of fixing the structural issues in the housing market. But for now, it has lifted buyers’ spirits and should boost conveyancing activity in the early part of 2015.
The improving economy and rock bottom mortgage rates should help to sustain this momentum ahead of the election. Further measures to boost housing supply are promised, so conveyancers should brace themselves to take advantage of continuing growth. Ensuring they are ready to deal with rising transactions must be at the core of their strategy – not necessarily by hiring staff, but by finding ways to hone their processes and work smarter to their maximum capability.”
Guy Meacock from Prime Purchase, had this to say: "With a monthly increase of 1.8% in London, this brings the annual change in house prices for the capital to 16.3%, which is considerably higher than any other region. However, within London the boroughs are behaving quite differently. Kensington and Chelsea saw a monthly drop of 0.6%, for example, while Newham and Hillingdon saw rises of 1.6 and 1.5% respectively. An average is therefore quite unhelpful. It is always worth remembering that the Land Registry doesn’t include transactions bought in trust names or corporate entities, as many of these are not recorded.
Stamp duty changes introduced in December are set to benefit the mainstream market but are also having a positive impact higher up the chain. Removing the slab system has taken away some pressure up to and the other side of certain price brackets, particularly the £2m one. It is also becoming apparent that the extra stamp duty will come off the purchase price so it is not so much an issue for the buyer as for the vendor. Ultimately, it is being negotiated into the price the buyer pays.
Despite the slowdown in house price growth, there is still some confidence among buyers and sellers with interest rates likely to remain low for the foreseeable future."
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "The Land Registry is just the latest index to show that house-price growth is slowing ad with the BBA pointing to a dip in lending as well, the market is definitely more subdued. That said, the CML pointed out that 2014 was the best year for mortgage lending since 2008 and while we expect the housing market to be quieter over the next few months, we still predict lending in the region of £215bn for the year, compared with £205bn last year.
While first-time buyers were a key driver of the market last year, we expect the remortgaging market to be strong over the next 12 months with borrowers not so much fearing a rate rise but enticed by some of the astonishingly cheap deals now available.
With this month’s minutes from the Monetary Policy Committee revealing that the Bank of England’s two hawks have dropped their calls for an interest rate rise, it seems unlikely that we will see rates go up this year, or even next. With inflation falling to 0.5% in December, it’s lowest level in nearly 15 years, the pressure is off the rate setters to move rates.
Lenders have already reacted to falling Swap rates with record low mortgage rates. With ten-year fixes now available from just 2.94%, an exceptionally cheap deal for such certainty, more and more borrowers will be tempted to commit for the longer term. The next step is for lenders to start easing criteria rather than cutting rates, a move we hope to see this year."
