However the data also shows an annual price increase of 1.1 per cent which takes the average property value in England and Wales to £161,605. Over 66,700 residential properties in England and Wales lodged for registration in October ranging from £8,000 to £25.5 million, with applications highest in the South East.
The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 7.0 per cent. Wales experienced the greatest monthly rise with an increase of 1.5 per cent.
The North East experienced the greatest annual price fall with a decrease of 5.8 per cent, and also saw the most significant monthly price fall with a decrease of 4.2 per cent.
Independent buying agent Gabby Adler, says:
"October was a disappointing month for the housing market across England and Wales. The Autumn market has been slower than expected with fewer new properties coming up for sale.
"The market has significantly slowed down now for Christmas and the holiday season. There are still many price reductions as sellers try to do a deal before the end of the year but far fewer properties coming to market so less choice for buyers. While prices have fallen in parts of the country, the picture in London is very different. In parts of the capital competition for the most desirable homes is very hot indeed with properties achieving above the asking price.
"Lack of stock is the main problem in parts of London such as Barnes, where there is almost nothing on the market in the £800,000 to £1.3m price bracket. This is what most families are looking to spend when they move to the area. The top end of the market is quite different and most of these properties are sitting on the market for many months, with super-prime properties taking a year or more to sell across Richmond-upon-Thames."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
"Swap rates may have edged upwards in the past week but it is of little consequence as those 30-odd lenders with access to Funding for Lending are still able to launch cheap fixed rates. Accord is the latest lender to launch a mortgage 'sale' yesterday with five-year fixed rates available from 3.09 per cent for those with a 30 per cent deposit. Abbey, the intermediary arm of Santander, launched its own seven-day sale last week, with two-year fixed rates available at a rock-bottom 1.99 per cent for those with a 40 per cent deposit.
"What do these deals have in common? Hefty deposits are still the order of the day to access the very best rates but we are slowly seeing more options at higher LTVs. We expect this to take off next year with an uptick in the number of high LTV mortgages available at more competitive rates. This will help boost the number of first-time buyers able to get on the property ladder, which will help the overall general health of the housing market."
Jonathan Hopper, managing director of the property search consultants Garrington, commented:
"The recession might be statistically over. But you wouldn't know it to look at this data. The property market is still looking both fragile and unpredictable. Prices in the capital continue to defy both logic and gravity - and their relentless rise is the main reason the national average posted a respectable 1.1% increase in the past year. Best of breed properties in London are seeing strong demand, and the bullishness is now radiating out to some areas from the capital. We saw asking prices increase significantly in London and the home counties last month.
"But London buyers are continuing to negotiate hard, and actual sale prices are increasing at a more realistic rate. October traditionally shows a spike in demand as many would-be buyers are spurred into action by the thought of 'finding somewhere by Christmas', or at least being at the front of the queue for next year. A gradual return to competition in the mortgage market should help demand too. But regional disparities are getting more glaring than ever, and the outlook for the country as a whole is still very mixed."
Tracy Kellett of buying agents, BDI Home Finders, commented:
"Quite simply, there is London and there is the rest. For London prices to have added 7% over the past year in a climate as hostile as this shows what a peculiar microclimate it is. While London remains in a league of its own, there is extreme volatility around the rest of the UK.
"In August, the North East showed the highest price rise, in October it showed the steepest fall. The fact that Wales, which has been under the cosh for some time now, showed the strongest price growth during October underlines the extreme volatility in the market. The continued low level of transactions is making it very difficult to gauge exactly what is going on.
"The general picture, though, is of a property market that is flat and under pressure. If it weren't for London, the average annual change in England and Wales would be a lot less than 1.1%. The capital is giving the kiss of life to the rest of the country. The economy is at least growing now but it will need to show longer term growth before the property market as a whole bounces back. Barring the most sought-after properties, buyers continue to hold all the cards."
David Brown, commercial director of LSL Property Services, comments:
“House prices are still rising annually, and Funding for Lending is likely to provide the main source of momentum for the housing market in the coming months. But despite the recent signs of improvement in mortgage lending, and a mini-bounceback in sales activity last month following a slower summer, lenders are being held back from boosting high LTV lending to any semblance of its pre-crunch level by the capital they are required to set aside for lending to those with small deposits.
"In turn, this is sustaining demand in the rental sector and maintaining competition among renters, even outside the peak season. With the Financial Planning Committee set to clarify tomorrow the capital buffers banks must raise, it’s crucial that they don’t take drastic action that will undermine any progress the mortgage market has made, and limit the future impact of the Funding for Lending scheme.”
