House prices £34,000 above pre-crisis high
- At £273,528, home values now £34,192 higher than at height of the housing boom in February 2008
- But over half of that value (£17,340) added in the past year, following annual rise of 6.8%
- London buyers at top-end brace for General Election, but lower rungs of ladder keep moving
- Completed home sales in the opening two months of 2015 down 9% compared to a year ago
Adrian Gill, director of Reeds Rains estate agents, comments: “Seven years on, and the average house price across England and Wales is £34,192 higher than at the pinnacle of the housing boom in February 2008. We’re performing well by yesterday’s standards, but we’ve got to keep an eye on the trajectory of our current recovery. Average house prices are currently 6.8% (£17,340) higher than they were last year – but this is the smallest annual increase witnessed for fourteen months, as the market mellows from the extraordinary noise of the past year. So far in 2015, completed home sales are 9% lower than over the same period twelve months ago, but demand hasn’t faded out of view. February still marks a 4% improvement on January activity levels, and in recent weeks, we’ve seen agreed sales climb above 2014 levels, as activity comes into focus.
“After storming ahead of the rest of the country in the whirlwind of last year, the conditions have calmed in London and the South East. Their combined lead on the rest of the UK hit a summer-peak in July 2014 – when this corner of the country hoisted the wider England and Wales annual change to 5.4% higher than it would have been otherwise – but in February this growth gap has fallen to less than half its former glory, to only 2.2%. Annual house price growth in England and Wales stood at just 4.6% in February excluding these weighty regions.
“The capital has already had the first taste of added pressure placed on prime property in the form of revised Stamp Duty, and the £1.5m to £5m slice of the market has also been hit by cold feet in the run up to the General Election, with the threat of a potential mansion tax. This let-up of high-end activity has brought down the average London house price, but beneath the surface, the lower rungs of the ladder are thriving. For instance, the borough of Newham – where the typical property value currently stands at £273,727 – saw an enviable 2.1% monthly price rise, more than double the overall 1.0% average London price jump. In terms of annual growth, more affordable areas like Barking and Dagenham (+16.5%), Bexley (+15.6%) and Waltham Forest (+16.8%) are punching well above their weight, coming in ahead of the year-on-year improvements seen in high-end areas like Kensington and Chelsea, where prices have fallen 7.4% in the past twelve months.
“In the south of the country overall we’re seeing a very orderly market, with buyers and sellers on more of an even keel. Rates of annual growth have slowed across the board in England and Wales, but it is regions with the lowest average property prices which are dragging their feet. The North saw the smallest annual uplift in January, with home values just 1.9% higher year-on-year, while in Yorkshire and The Humber prices stagnated over the month.
“On a monthly basis, house prices are trundling along overall, climbing 0.5% since January to reach a new record. The housing shortage may be propping up property price growth, but more needs to be done to stave off this winter lull and invigorate the property market recovery. It’s pivotal that the Chancellor recognises the importance of expanding the UK’s property stock in the upcoming Budget. Measures like the Help to Buy scheme and reforming Stamp Duty have airlifted support to the bottom end of the market, but unless more new homes are built, he’s practically playing a zero-sum game: reshuffling a deck doesn’t leave you with more cards.”