December house prices down 0.2 per cent

Nia Williams

January 31, 2011

The data also shows an annual price increase of 1.5% which takes the average property value in England and Wales to £163,814.

Five regions in England and Wales experienced increases in their average property values over the last 12 months. The region with the highest annual price change is London with an increase of 6.2%. London also experienced the greatest monthly rise with an increase of 1%. The region with the greatest annual price fall is the North East with a movement of -3.3%. The South West region experienced the most significant monthly price fall with a movement of -1.2%.

The most up-to-date figures available show that during October 2010, the number of completed house sales in England and Wales dropped by 15% to 55,964 from 65,736 in October 2009. The number of properties sold in England and Wales for over £1 million increased by 1% between October 2009 and October 2010, from 572 to 579.

Commenting, Philip Clarke, a director of property consultants, Fisher Property Services, said: “The latest Land Registry data highlights the sharp regional variations in house prices. Over the past year the south has proved very resilient, London in particular, while prices in the north have gone south. This fragmented picture is likely to continue over the course of 2011.

“A shortage of stock in the capital, coupled with relatively high demand, both domestic and international, is driving prices up. London looks set to defy the downward pressure on prices that other areas of the country, regions in the North especially, are experiencing.

“Good properties in sought-after areas will continue to command good prices, whereas undifferentiated properties in areas where unemployment is rising more sharply, could see price falls in the high single digits over the course of the year. The North’s heavy reliance on the public sector and industry means further price falls are almost inevitable.

“During 2011, prices in the north, south and London are unlikely to trend in the same direction. The south and London look set to hold their own in 2011, with the capital even seeing a marginal increase in prices come the end of the year.

“Fortunately for the property market, an interest rate rise in the near future looks less likely given the contraction of the economy during Q4. However, when rates do eventually rise, there is likely to be a significant rise in defaults, which will place further downward pressure on prices.”

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