"Growth in the North West is underpinned by activity in both Greater Manchester and Merseyside, where prices are increasing at a staggering annual rate of 20.9%."
In April, the North West continues to lead the way with the highest rate of annual house price growth, at 18.4%. The North West’s prominence this month has been enabled by both Greater Manchester and Merseyside, where prices in the two areas are increasing at an annual rate of 20.9%.
It is the price of semi-detached homes that has seen the largest increase in these two conurbations, with prices up by some 24% in Greater Manchester and 19% in Merseyside.
There are two regions that have not topped their previous record price - the North East and Greater London. This is the first time that two or more areas have simultaneously failed to set a new record price in the last seven months.
Greater London has the lowest price growth rate of all the regions at 2.8% and is the only one to have a rate of less than 10%. In Greater London it is the average price of flats that has seen the largest fall, down by 7.2% in April, compared to twelve months earlier. There are currently ten London boroughs where average house prices have fallen over the year, with six of these being in the top ten boroughs by value, i.e. most of the prime central areas of the capital.
On a monthly basis, the e.surv index shows a growth rate of 0.5% in May, down from the 0.7% growth seen in April. This monthly rate is at its lowest level since the UK came out of its first lockdown in June 2020.
e.surv says this slow-down in completion prices may be indicative of a slight - and with hindsight, an evidently temporary - cooling in the market as we approached the official end of the stamp duty holiday in March before it was extended. The e.surv data records the result of decisions taken two-to-three months earlier than the actual completion of the property sale – the index for May is therefore likely to be reflecting a point in time in February when purchasers were concerned that the stamp duty holiday was about to end, with any purchase then being made too late to qualify for the tax savings.
Richard Sexton, director at e.surv, commented: “Overall, we can see the market continues to enjoy the effect of the government’s stamp duty holiday. Buyers are still striving to complete purchases in time to benefit from the maximum tax break ahead of the change in June to a tapered deadline.
“Completion prices for transactions funded by both mortgages and cash grew by a startling 13.4% annually in May, and at a national level, prices in England and Wales rose on a monthly basis by some £1,800, or 0.5%. However, it is notable that the monthly price increases over the last three months are the lowest since June 2020, probably a reflection of the rapidly approaching end of the stamp duty holiday.
“Regionally, there has been continued price growth across Wales and all nine English regions. Prices performed particularly strongly in the North West which achieved its highest rate of annual house price growth, 18.4%. Growth in the North West is underpinned by activity in both Greater Manchester and Merseyside, where prices are increasing at a staggering annual rate of 20.9%. London and the South East have also seen growth, although at a lower level. It should be remembered that London property prices have already experienced a boom in the years following the global financial crisis, a rise not experienced by many other UK regions.
“Our property type data shows there has been a shift in the kind of homes that buyers are looking for. Working from home has encouraged interest in larger homes with gardens outside city centres. The demand for flats in central and inner areas of London and other cities has not been as strong as for other types of homes due to lifestyle changes and new working arrangements, alongside the absence of overseas buyers in prime central London due to Covid restrictions. The impact of the pandemic on flats has been amplified by the issues surrounding cladding for mortgage lenders.”
