House prices rise again
Annual house price change has remained positive for 10 consecutive months, with a movement of 6.7% in August.
Sales volumes have increased from last year. In March to June 2009, transaction volumes averaged 43,825 per month, while in the same period this year the average was 53,089 sales.
London experienced a positive monthly house price change of 0.9% in August, bringing the average property price to £345,734. This is the sixth month in a row in which the capital’s monthly movement has been greater than zero.
London’s annual change was also positive in August, at 11.4%. This is the eleventh consecutive month in which the figure has been above zero and the strongest annual growth experienced by any region in England and Wales. However, the growth figure is less than last month’s movement.
All 10 regions in England and Wales experienced increases in their average property values over the past 12 months. While London saw the highest annual price rise, the region with the smallest annual price rise is the North East with a movement of 1.6 %.
The West Midlands experienced the greatest monthly rise with a movement of 1.2%. Yorkshire & the Humber is the region with the most significant monthly price fall with a movement of -1.4%.
Capital Economics said that coming after several recent reports of renewed falls in house prices, the latest rise in the Land Registry Repeat Sales Index only serves to highlight the uncertainty around the housing market at the moment.
The research house said: “With sluggish economic growth and a further rise in unemployment expected, the key economic drivers of the housing market look weak, even before the full impact of the fiscal austerity measures bite. As such, although there may be some further growth in final sales prices this year, we expect significant falls in 2011.”
But Nicholas Leeming, commercial director of Zoopla.co.uk, said: “The Land Registry index is more comprehensive because it tracks all home sales, not just a small sample of those who need mortgage finance. The slight increase in prices is therefore a sign that the market is less weak than some are suggesting.
“But there is no room for complacency. Mortgage volumes are down as lenders conserve cash to meet wider, regulatory requirements. Confidence in the economic recovery is shaky as spending cuts loom. Buyers are being cautious at a time when the supply of homes for sale has been rising and so we expect relatively subdued trading to continue.”