House prices down 0.3%, reveal Land Registry

April house prices down 0.3% since March: average house price in England and Wales now £160,417, report Land Registry.

Related topics:  Legal
Millie Dyson
29th May 2012
Legal
The April data from Land Registry's flagship House Price Index shows an annual price decrease of 1.0 per cent which takes the average property value in England and Wales to £160,417. The monthly change from March to April is a decrease of 0.3 per cent.

The region in England and Wales which experienced the highest increase in its average property value over the last 12 months is London with a movement of 5.1 per cent. London also experienced the greatest monthly rise with an increase of 5.1 per cent. Yorkshire & The Humber experienced the greatest annual price fall with a decrease of 5.6 per cent. West Midlands saw the most significant monthly price fall with a decrease of 2.7 per cent.

The most up-to-date figures available show that during February 2012, the number of completed house sales in England and Wales increased by 9 per cent to 43,331 compared with 39,670 in February 2011.

The number of properties sold in England and Wales for over £1 million in February 2012 decreased by 3 per cent to 462 from 478 in February 2011.

The Transaction Data shows Land Registry received over 1 million applications from all its customers (account and non-account) in April. This includes 931,857 applications by account customers, of which:

- 229,615 were applications in respect of registered land (dealings)

- 500,063 were applications to obtain an official copy of a register or title plan

- 131,252 were searches  

- 57,091 were transactions for value.

Paul Hunt, managing director of Phoebus Software said:

“A double-whammy of the return of stamp duty for first-time buyers and receding confidence among lenders hit property prices last month. According to LSL’s House Price Index, transactions in April dropped by 18% and that such a precipitous drop in activity hasn’t pushed prices down further shows most of the drop in transactions was predominantly for lower value properties.

"But we’re also seeing the impact of reduced confidence among lenders as in April Greek politicians dithered and ultimately failed to establish a government, which has brought the liquidity-damaging possibility of a Greek exit to centre stage. As the eurozone crisis has continued to develop this month, it’s likely ongoing caution from lenders will put further downward pressure on prices in May.”

David Brown, commercial director of LSL Property Services, comments:

“The end of the stamp duty holiday for first-time buyers is clearly still taking its toll on prices nationwide, which illustrates exactly how much of a benefit the tax break was for the market. On top of finding the funds for significant deposits, thousands of buyers now need to pull together enough cash to pay the taxman, and this will result in an even longer tenure in the private rented sector for many.

"But the fall also points to lenders being forced to pull back on higher LTV lending as a result of negative economic news and the ongoing crisis on the continent, and this is proving an additional hurdle for new buyers. However, despite the drop, it is well worth noting that house prices are still higher than at the end of 2011, highlighting the resilience of the housing market in spite of the economic climate.”

Charles Haresnape, Managing Director of Aldermore, said:

"A monthly decrease of 0.3% will surprise no-one and confirms that the market is continuing to bumble along the bottom. However, when you take into consideration that prices in London have risen by 5.1% over the past year, it reveals the extent to which prices have fallen in other regions of the country.

"Consumer confidence remains low and with continued turmoil in the Eurozone and distractions such as the Olympics and Euro football on the horizon, the signs aren't great for a imminent upturn in fortunes. Let's hope that the recent good weather encourages house hunters to think more positively about buying property."

Richard Sexton, director of e.surv chartered surveyors, said:

 “The housing market is being propped up like a Friday night drunk by landlords and wealthier buyers. House prices are tied to events across the Channel, and the market is feeling the full force of the political chaos that is paralysing the eurozone.

"The crisis is stemming the flow of mortgages, which is stifling first time buyer activity and dragging down prices. Fear in the investor markets over the future of the euro has pushed banks funding costs up by 40% since February. The major banks have responded by bumping up mortgage rates, and reducing lending to first time buyers to protect their balance sheets.

"A recovery in mortgage lending looks a long way off. Banks will continue to rein in the amount they lend to low income buyers over the next few months, and will be forced to raise rates further if the crisis worsens. They are terrified by the prospect of a messy Greek exit from the euro and Germany’s brinksmanship tactics in dealing with the debt crisis. Until the turmoil in Europe quietens down, mortgage lending will be subdued and prices will remain suppressed.

"The key that will unlock the door to consistent house price growth is more mortgages to borrowers with small deposits. But that won’t happen while the euro zone is in such a sorry state.”
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