New data from the Land Registry shows that house prices in England and Wales are getting closer to levels last seen in 2007. The average value is now £177,377, £3,892 below the peak from seven years ago (£181,269).
House prices have risen by 7.7 per cent in the last year, with London enjoying the biggest annual leap of 18.6 per cent. Nonetheless, while last year such figures would cause alarm over a housing bubble, the market has begun to moderate this year, with monthly increases averaging at 0.1 per cent from September 2014.
Indeed, London was far from the strongest performer on a monthly level, as regional markets catch up to the cooling capital. The East experienced the greatest monthly rise with a movement of 1.6 per cent, while Wales saw the lowest annual price growth with a movement of 2 per cent.
The North East saw the most significant monthly price fall of 2.7 per cent.
Peter Rollings, CEO of Marsh & Parsons, notes that parts of London already slipping too: “Prices are slipping in some of the most expensive areas of the capital, with values in Kensington and Chelsea falling 2.5 per cent over the month to October, as growth tails off more sharply at the top end of the market.
“Activity levels at the top tiers of the UK housing market have shown healthy growth, with sales of properties worth over £1 million rising 15 per cent in the year to August 2014. But fears of a potential ‘mansion tax’ could contaminate demand for prime property in the run-up to the general election. Uncertainty surrounding this and the possibility of other populist wealth taxes is putting off all buyers be they overseas or home grown, for whom Prime London property usually commands global appeal as a gold-standard asset. This could be a worrying development for London’s reputation as a business hub and natural outlet for investment, and could spell trouble beyond the capital if this lack of confidence at the highest rungs trickles down the housing ladder to the wider market. It is safe to say that ears will be pricked during Osborne’s Autumn Statement next week, and all parties need to be wary of quashing the intrinsic momentum of the property market.”
Source: The Movechannel