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House prices fall almost everywhere as property market takes on 'uncomfortable' feel


04-29-2016

 

For sale signs 
New data from the Land Registry shows house prices falling in March across the majority of regions

Considered by industry experts to be the most accurate of all the house price indices, fresh figures showed that property values edged down across the country, even in the high-demand South East. 

 

 

 

 

 

 

 

 

 

 

 

 

 

Where prices have fallen

Overall house prices in England and Wales fell 0.5pc in March, taking the average paid price to £189,901. The biggest drop was in Yorkshire and Humberside (-2.6pc). 

Values dipped 2pc in the West Midlands and 1.2pc in the North East. 

The potent cocktail of a growing population and a lack of stock continued to push London prices up in the mainstream market, negating the 10pc price falls at the luxury end of the sector. House prices in the capital inched up 0.2pc to £534,785. Homeowners in the East of the country saw the same rise in February. 

"Why I am troubled"

While monthly fluctuations, especially in a dreary March, are to be expected, these numbers could also come as a precursor to a period of significant uncertainty in the housing market. 

"I have worked through three property recessions and this has an uncomfortable yet familiar feel. I think the market is on the turn," said independent buyer and industry commentator Henry Pryor.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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"While we don't get the tissues out for those struggling to sell their £3m homes, it will hit the wider market," he said referring to the Chancellor's hike in stamp duty in December 2014 that raised the levy on high-value home sales. 

"A slowdown starts in luxury London and traditionally ripples out. It might not get to Shropshire until next spring but it will get there," he said. 

One central London estate agent told the Telegraph this week that "prices needed to come down at the top end of the market by up to 30pc in some cases". 

According to Mr Pryor, such price falls impact the 'bank of mum and dad' and how much they then lend to their offspring buying in areas like Brixton and Clapham, for example. 

"The infection from luxury to mainstream is much more transferable than anyone imagines, and these are the reasons why I am troubled by the Land Registry figures," he said. 

A fall in sales

The Land Registry data also revealed a fall in the number of completed house sales in England and Wales in January fell by 5pc to 54,254 compared with 56,937 in January 2015.

This dispels reports that there was a rush to buy a second home or a buy-to-property ahead of April - when the Chancellor introduced a 3pc increase in stamp duty on these two buyer tribes. 

"We were expecting higher transaction levels in the first three months of the year as the stamp duty deadline approaches. But with the number of completed house sales in England and Wales falling by 5pc in January compared with the same month last year, there does not seem to have been the stampede that many expected," said Jeremy Leaf, former chairman of Rics (Royal Institute of Chartered Surveyors). 

"A decline in number of property transactions continues to be a worry, as if people aren’t able to move in and out of the market when they want to, there will be an inevitable knock-on effect for the rest of the economy. On the ground we want to see more balance between supply and demand," he added. 

Brexit

The looming threat of a Brexit could also be causing both builders and buyers to sit on their hands. 

"Current increased domestic economic and political uncertainties could be reining in housing market activity, especially in the run-up to June’s EU referendum," said the economist Howard Archer. "Consequently, house prices may well be softer for the next few months."

The economist added that he expected housing market activity to regain limited momentum in the second half of 2016 on the assumption that a vote to stay in the EU reduces uncertainty and supports a pick-up in economic activity.

www.telegraph.co.uk/

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