House prices remain fixed in May says Land Registry

The May Land Registry house price index has shown that there was no monthly house price change between April and May this year, leaving the average property value in England and Wales at £179,696.

Related topics:  Property
Warren Lewis
26th June 2015
Stats

The regional data indicates that, London and the South East experienced the greatest increase in their average property value over the last 12 months, both with a movement of 9.1%, while East and North East experienced the greatest monthly rise, both with a movement of 1.6%.

The number of completed house sales in England & Wales decreased by 12% to 59,311 compared with 67,321 in March 2014.

The number of properties sold for over £1 million decreased by 6% to 842 from 893 a year earlier.

Repossessions in England and Wales also decreased by 35% to 706 compared with 1,092 in March 2014.

Peter Rollings, CEO of Marsh & Parsons, comments:  “Monthly house price change may be static, but annual improvements across the UK means we are now just shy of the November 2007 peak. London and the South East continue to ace proceedings in annual terms, but the North East has proved something of a wildcard with the largest monthly improvement, along with the East.
 
The post-election feel-good factor will soon serve up higher prices or transaction levels, and the market is set for future growth given the improved buyer confidence and increased supply of properties we’ve seen throughout June. High-end buyers continue to court prestigious London properties and, as a result, prices will continue to rise sustainably in central areas.”  

Andy Knee, chief executive of LMS, commented: “Greater confidence following the election and a pre-summer boost to the market saw house prices rise by 4.6% year-on-year in May, with London and the South East driving the increase.
 
It is also welcome to see areas outside this – the East and North East – experience a monthly increase. These areas were hard hit by the crash and many will only now be starting to see their property values return to previous prices. This means they may now finally escape being mortgage prisoners, offering the opportunity to remortgage and boost incomes.
 
More worryingly, however, is that the average monthly number of property transactions has decreased substantially year on year from March 2014 to March 2015. We anticipate that figures later on in the year – particularly from May onwards – will see a rise but the market should not become complacent. Supply and affordable housing remains critical to the long-term security of the market and needs to be addressed.”

Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “At the start of May house price rises were on pause as buyers looked the other way to the ballot boxes. But the rhythm has certainly resumed since – and we’ve seen a more rapid rhythm of properties going under offer and sales agreed, as demand bursts into song again.
 
The Election outcome had more of a bearing on the London market than other parts of the country – with a mooted Mansion Tax weighing more heavily on the minds of high-end buyers, not long after the introduction of a heavier stamp duty. As a result, price rises in neighbouring regions are almost neck-and-neck with the capital, and there’s been an interesting calibration as more affordable regions like the East of England push their way to the front of the pack with the fastest price growth.
 
At the lower end of the ladder, vigorous demand is setting the pace for athletic activity over the coming months. Buyers are being cheered on by some of the best conditions we’ve ever had for the property market – record low interest rates, mortgage rates, and plenty of support schemes like Help to Buy.”

Guy Meacock, head of the London office of buying agency Prime Purchase, said: "The traditional seasonality of the market has been absent so far this year and has yet to really recover from the election result.

What happened before the election is now slightly irrelevant - what will be interesting is how the market performs in coming months. There hasn’t been an immediate recovery although it does feel like a more balanced and even market, with the return of the domestic buyer in prime central London and less focus on wealthy international buyers. There continues to be an imbalance between supply and demand, with people moving less often because of the significant costs associated with doing so. There is simply not as much housing stock to buy and with the population of London increasing, this will broadly underpin price growth for the foreseeable future."

Ben Thompson, Managing Director, estateagent4me.co.uk, commented: “Looking at the monthly trends and fluctuations in house prices often leads to a mixed picture, especially given the lead in times for publishing data. Trends reported today, are actually representative of what happened in the market quite some time ago. With the dynamic pace of the housing industry at the moment, these figures quickly become out of date.

It is paramount that consumers have the most up to date market data. This allows them to make an informed decision, and in turn, hopefully get the best result for them. Our latest Estate Agent Performance Index highlighted that on average, house sellers across England and Wales could have received an additional £27,456 for their property had they had the relevant information and chosen the best performing agent for them.”

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments: “Today’s Land Registry data shows that house prices are continuing to march upwards with London and the South East seeing the greatest annual growth. The trend is not deterring homebuyers,  as mortgage approvals are also at their highest since the Mortgage Market Review (MMR) was implemented according to the British Bankers’ Association (BBA). But it does mean that the average borrower is taking out a bigger loan than at any point since the recession, as well as putting up the largest average deposit for six years.¹

Consumers can be thankful for the mortgage price war which continues to drive loan rates to record lows. Cheap pricing and lender competition are key factors that are sustaining the momentum in the housing market, but low rates won’t last forever. The latest signs from the Bank of England are that there may be less than a year to go before the base rate rises, so the second half of 2015 will be a crucial window to act for anyone considering remortgaging, as well as potential homebuyers.

The risk remains that rising house prices will leave growing numbers of aspiring first time buyers in a position where they will struggle to raise the required deposit. It is widely assumed that spending cuts will dominate next month’s emergency Budget, but the government mustn’t forget the need to increase housebuilding and avoid an affordability crisis.”

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