Property prices in England and Wales fall again in April, data shows
30-05-2012
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It’s flagship House Price Index also shows an annual price decrease of 1% and the region which experienced the highest increase in its average property value over the last 12 months is London with a rise of 5.1% while Yorkshire and Humber saw the biggest annual fall at 5.6%.
London also experienced the greatest monthly rise with an increase of 5.1% taking the average price to £360,721 and the West Midlands saw the most significant monthly price fall with a decrease of 2.7%.
The South West saw a monthly price increase of 2% and an annual gain of 0.5% taking the average house price in the region to £174,261. The South East has a monthly rise of 0.1% and an annual rise of 0.4% taking the average price to £206,261.
Wales has seen a steeper annual price fall of 4.6% and a monthly fall of 0.1% with the average property now costing £114,762.
Over 51,000 residential property sale prices in England and Wales lodged for registration in April ranging from £8,000 to £55 million.
The most up to date figures available show that during February 2012, the number of completed house sales in England and Wales increased by 9% to 43,331 compared with 39,670 in February 2011.
The number of properties sold in England and Wales for over £1 million in February 2012 decreased by 3% to 462 from 478 in February 2011.
A difficult economy and increasing reticence from lenders is conspiring to subdue house prices and the number of buyers on the move across many parts of the country, according to Peter Rollings, chief executive officer of estate agent Marsh & Parsons.
‘But this certainly isn’t the case in London, which is moving at a different speed entirely from the national market. With house prices so much higher in the capital, fewer applicable buyers were affected by the end of stamp duty holiday for first timers, unlike the lingering impact elsewhere in the country, where a higher proportion of buyers brought forward purchases.
‘Equity rich buyers are still flocking to prime parts of the capital, and after the initial shock of the budget in March, wealthy investors are focussing on double digit annual price growth in many areas like Kensington and Westminster instead of the 2% increase to stamp duty,’ he explained.
‘Demand has only been bolstered by the appetite for safe assets from international buyers looking to escape seeing their wealth diminished by the eurozone troubles and good quality homes are selling quickly,’ he added.
Richard Sexton, director of e.surv chartered surveyors, believes that house prices are tied to events across the Channel and the market is feeling the full force of the political chaos that is paralysing the eurozone.
‘The crisis is stemming the flow of mortgages, which is stifling first time buyer activity and dragging down prices. Fear in the investor markets over the future of the euro has pushed banks funding costs up by 40% since February. The major banks have responded by bumping up mortgage rates, and reducing lending to first time buyers to protect their balance sheets,’ he pointed out.
‘A recovery in mortgage lending looks a long way off. Banks will continue to rein in the amount they lend to low income buyers over the next few months, and will be forced to raise rates further if the crisis worsens. They are terrified by the prospect of a messy Greek exit from the euro and Germany’s brinksmanship tactics in dealing with the debt crisis. Until the turmoil in Europe quietens down, mortgage lending will be subdued and prices will remain suppressed. The key that will unlock the door to consistent house price growth is more mortgages to borrowers with small deposits. But that won’t happen while the eurozone is in such a sorry state,’ he added.
Paul Hunt, managing director of Phoebus Software, also believed the eurozone crisis is preventing the UK property market from recovering. ‘We are seeing the impact of reduced confidence among lenders as in April Greek politicians dithered and ultimately failed to establish a government, which has brought the liquidity damaging possibility of a Greek exit from the euro. As the eurozone crisis has continued to develop this month, it’s likely ongoing caution from lenders will put further downward pressure on prices in May,’ he said.
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains agreed that lenders have been forced to reign themselves in as a result of the consistent trickle of bad news from the continent.
‘But even though prices have slipped this month, during 2012 property has proved a relatively stable investment, as prices have risen by 0.5% since December 2011. We may not be about to see prices boom, but steady growth in some regional markets means property has proved capable of holding its value despite the economic buffeting the market has suffered in the last few months,’ he added.
