Strongest monthly rise in house prices since summer but London property starts year in negative territory for first time since 2009
03-01-2015
- Average house price now sits at £179,492 Land Registry figures show
- London values slipped 0.2% monthly with the North West performing best
- Thurrock in Essex has seen property prices climb 16% in the last year
By Lee Boyce for www.Thisismoney.co.uk
House prices were up 1.3 per cent in January with the average property now worth £179,492 in England and Wales, the latest Land Registry figures show.
The annual rise was 6.7 per cent, a figure that has gradually fallen from the peak of 8.2 per cent reached in August 2014, which at the time was the strongest yearly growth since before the financial crisis.
However, the monthly rise wasn't driven by the capital which was one of three regions to experience value falls.
House prices: Despite the monthly falls experienced in London as a whole, annually, the capital has performed strongly
Prices in the capital fell 0.2 per cent, with a similar blip recorded in the North East and a larger drop of 1.5 per cent seen in Yorkshire and Humber.
It is the first time London has started a year off with a fall in house prices since January 2009, when values tumbled 1.5 per cent in the wake of the financial crisis.
Residential housing sale and letting signs are seen in Hastings in southern England, January 3, 2008. Banks expect to cut back further on lending as a result of the credit crisis, the Bank of England said on Thursday, while Federal Reserve policymakers thought big interest rate cuts may be needed to buoy the U.S. economy.
The region which saw the biggest boost was the North West, with prices rising 2.6 per cent in the month. Prices in the South West were up 1.5 per cent and in the East 1.4 per cent during January.
In terms of annual growth, London is the region that still the leads the way with 12 per cent added value in the last 12 months.
But the monthly falls have been largely triggered by the Royal Borough of Kensington and Chelsea.
Prices in this expensive slice of the capital fell 1.9 per cent in the month and it is the only borough to record single-digit growth over the year, with other parts performing far more strongly.
It still remains the most expensive borough to buy in, with the average property selling for nearly £1.3million, but it suggests millionaires appetite for the area may be waning, especially with the new stamp duty system coming into play in December, making it more expensive to buy property valued at seven figures.
Big dip: Annual house prices were racing ahead in London in the summer, but have since started to fall
Outside the London boroughs, biggest annual house price growth was seen in Thurrock, Essex.
The home of Lakeside shopping centre is within easy commuting distance of the capital and has seen prices climb 16 per cent in the last year.
Guy Meacock, head of the London office for buying agency Prime Purchase, said: 'After five years of strong house-price growth, there is plenty of uncertainty, with the forthcoming general election, possible mansion tax and an interest rate rise next year – all of these mean that the next six months is likely to be an improving market for buyers.'
It comes after a report yesterday revealed almost three-quarters of all homes sold in January failed to achieve their asking price.
Surprise hit: The North West saw property values up 2.6% in the month. But London still leads the way annually
The rise was evidence that 'buyers have the power to negotiate again', according to the National Association of Estate Agents which produced the figures.
The proportion of homes sold for under the initial asking price rose to 73 per cent in January, up from 56 per cent in the same month a year ago.
Elsewhere, the Land Registry data showed in the period between August and November 2014, sales volumes averaged 79,549 per month.
This is an increase from the same period a year earlier, when sales volumes averaged 77,694 per month.
It also found the number of properties sold in England and Wales for more than £1million in November 2014 decreased by 18 per cent to 869 from 1,060 in November 2013. In London, there was a 24 per cent drop.
HOUSE PRICES: HOW MONTHLY VALUES HAVE FARED IN RECENT YEARS
| Year | England and Wales | London |
|---|---|---|
| Jan-09 | -0.60% | -1.50% |
| Jan-10 | 1.40% | 3.10% |
| Jan-11 | 0.20% | 1.30% |
| Jan-12 | 0.90% | 1.50% |
| Jan-13 | 1.30% | 1.90% |
| Jan-14 | 1.30% | 2.40% |
| Jan-15 | 1.30% |