House price growth hits 2-year low
Annual property price growth has slowed to 4.1% in June – the smallest yearly rise since August 2013. The average house price in England and wales has now hit a high of £278,849.
London only ranks seventh in the regional growth tally, with annual price rises falling to just 1.8% in June.
Adrian Gill, director of Reeds Rains and Your Move estate agents, said: “Whilst the vibrancy of house price growth across England and Wales has faded in the past year – with annual rises more than halving – the market still has colour in its cheeks.
“On a monthly basis typical property values have climbed 0.3%, or £966, since May and although growth has slowed, the property market recovery continues to paint an attractive picture for homeowners across the country – and average property values across England and Wales reached a bright new record of £278,849 in June.
“This is the fifth time already this year that house prices have hit a new high, and in cash terms it adds up to home values being £10,980 higher than a year ago.”
Buyers came back to market after the general election lull, as home sales increased to 15% month-on-month, reaching a total of 73,000.
Gill added: “In addition, home sales across England and Wales soared 15% month-on-month in June, reaching a total of 73,000. This is above and beyond the seasonal uplift we’d typically expect at this time of year – and this new buoyancy in activity levels bodes well for property market in the coming months.
“It’s clear the general election distorted the usual tide of the market, with many buyers waiting until afterwards to complete on their purchases. In the first half of 2015, sales are 13% lower than the same period last year. But June’s sharp upward spike shows the start of this calibration back to firmer territory, as confidence in the political landscape solidified with a majority government.”
In the cheapest London borough of Barking and Dagenham house prices rose by 15% annually and in the lowest priced boroughs across the capital annual prices increased by 10.1% on average. This compares to a steadier 2.8% year-on-year rises in the most expensive London locations.
Gill said: “It is the pricier south of the country which has seen the most significant slowdown in sales – with the volume of properties sold in London and the South East 15% lower than 2014 levels. But healthier activity levels in the North, Yorkshire and Wales should help to balance out some remaining regional disparities in price growth.
“It’s encouraging that we’re seeing livelier activity where prices need to get back onto their feet – as there are still some pockets of Wales, the North and Yorkshire where house prices are lower than twelve months ago.
“With borrowing cheaper than ever, wages recovering, and government schemes and incentives to lean on, buyers’ purchasing power is stronger than it has been for a long while. As a result of this positivity, higher demand should place some upward pressure on prices in coming months, and keep the momentum of the market moving forward.”