London home prices still growing at 5% a year
Greater London is still showing property price rises of over 5% a year, but growth has stalled across the rest of the UK.
Four regions in the UK have seein annual house price falls, including the North, North West, Yorkshire and Humberside and Wales, according to the LSL/Acadametrics index, with all other regions, except Greater London, seeing price falls in the last three months.
There is a sense here of gathering momentum around a falling annual index, again partly due to the effect of strong growth recorded in early 2010 which is now dropping out of the figures,” said Dr Peter Williams, chairman of Acadametrics.
Across England & Wales, the average property price fell by 0.1% in January to £221,211, although prices are still some £20,975, or 10.5%, above the lowest price recorded in April 2009 during the last housing downturn.
“There is no immediate evidence of a double dip recession although we anticipate that house prices will fall further in February 2011. This is a result of the larger than average increases experienced in January and February in 2010 dropping out from the annual statistics,” said Williams.
Williams said prices are expected to stay flat or show marginal declines, adding the course of the housing market largely depends on interest rates, the economy and the availability of mortgage finance.
“The Monetary Policy Committee has a delicate balancing act to sustain, although the market is now pricing in rate rises through the year,” he said.
“Although total mortgage lending for the year at £136.3bn was slightly above expectations, it was the lowest annual total since 2000 and there is a general expectation that the total for 2011 will be lower still.”
David Brown, commercial director of LSL Property Services, said prices are being cushioned by continued demand from cash-rich buyers, as well as the slight reduction in the supply of properties hitting the market.
“We should see a bubble of increased activity at the top end of the market in the next couple of months as buyers look to hurry through purchases of properties worth more than £1 million before the stamp duty hike in April.”