House prices drop by £800 in three months - but are still up 7% over the year
01-01-2015
- The average house price in England and Wales has now fell to £176,600
- This is compared to a peak of £177,400 earlier this year in August
- But house prices are still up by seven per cent over this year
- In London, prices have dropped from £462,300 to £461,500 in three months
- Flats and terraced houses have suffered the greatest fall in value since the summer
By Louise Eccles, Property Correspondent For The Daily Mail
Homeowners have seen £800 wiped off the value of their property since the summer as the market cools, new figures have shown.
The average home in England and Wales has now fallen from a peak of £177,400 in August to £176,600 in November, according to the Land Registry.
House prices are still up by 7 per cent over the year, but have dropped steadily every month since August.
The average home in England and Wales has now fallen from a peak of £177,400 in August to £176,600 in November
This means that as growth across many parts of Britain slows, the best time to sell your home may well have passed.
In London, prices have dropped from £462,300 to £461,500 in three months, after peaking in the summer. Economists have claimed that the London market slowed as it reached an affordability ceiling after months of steep price rises.
Experts also said the mortgage market review, which placed tougher restrictions on mortgage lending, had cooled the market. Introduced in April, the rules ensure banks carry out more checks on borrowers’ finances before agreeing to lend to them.
Mark Harris, of mortgage broker SPF Private Clients, said the figures offered ‘growing evidence of a slowdown in the housing market’. He added: ‘We expect uncertainty around the election to keep the housing market fairly subdued until after May.’
Estate agents Savills has predicted that property prices will flatline in London in 2015 but rise by 10 per cent on average elsewhere in Britain over the next 12 months.
But as workers are forced out of the capital, prices have rocketed in neighbouring counties, rising by £11,000 in Surrey over the last three months.
They also rose by £9,000 in Buckinghamshire and Oxfordshire, about £6,000 in Hertfordshire, Cambridgeshire, Kent and Hampshire and £5,000 in Essex.
Prices in the north and midlands have also risen by at least £1,000 since August and are yet to peak, experts said.
In London, prices have dropped from £462,300 to £461,500 in three months, after peaking in the summer
Counties experiencing price hikes include large parts of Yorkshire, Lancashire, Derbyshire, Nottinghamshire and the west Midlands.
Richard Donnell, at market analysis firm Hometrack, said recently: ‘The pick-up in house prices that started two years ago has spread across all UK cities.
‘By the end of the year, we could well see monthly house price growth in London slipping below that of some of major cities outside the south east.’
Flats and terraced houses have suffered the greatest fall in value since the summer, averaging £1,360 less in November than in August.
This compares to a more modest fall of £530 for detached homes, and a rise of £720 for semi-detached houses, according to Land Registry.
Separate research found yesterday that the gap between London house prices and the rest of the country is at an all-time high.
The gap has doubled in the last six years from £100,000 to almost £219,000, Nationwide said.
The gulf has grown steadily since the 1990s but surged last year as London prices accelerated far beyond the rest of the country.
The most expensive sale in November was the London borough of Camden, where a home sold for £8.5million
The building society blamed a lack of supply in London and a rise in foreign investment, which pushes up prices.
The gap between London and the rest of the UK is now 116 per cent, meaning it costs more than double to buy in the capital than elsewhere.
This compares to 20 years ago when homes in the capital cost 29 per cent more and the gap was just £15,700, 14 times less than the current £219,000 difference.
The most expensive sale in November was the London borough of Camden, where a home sold for £8.5million. The cheapest sales were in Burnley, Lancashire where two properties sold for £15,000 each.
Robert Gardner, Nationwide’s chief economist, said: ‘The gap is the largest it has ever been. One factor which may have boosted demand in London more than elsewhere could be the foreign demand in property, which has boosted the market.
‘There may also have been better wage growth in London and demand may be more likely to outstrip the supply.’