House prices rise but price growth slows

Michael Lloyd

March 12, 2018

house price index

Average house prices rose again in February, up 0.5% over the month, the biggest rise in five months.

The Your Move House Price Index found the North West, East Midlands, South West and Wales all saw new peak average prices in the month.

Annually, however, price growth continued to slow, slipping to 0.6% from 0.7% in January 2018.

It leaves the average value of a home in England & Wales at £299,556, up £1,512 compared to one month earlier, and £1,700 compared to a year ago.

Oliver Blake, managing director of Your Move and Reeds Rains estate agents, said: “When examining the bigger picture, house prices are steadily balancing to meet the needs of house buyers which is welcome news for those looking to take their first steps onto the property ladder.

“However, housing supply in the UK isn’t meeting demand and there is still a bottleneck of available properties. The industry needs to work together to provide a long-term solution to increase movement within the market.

“By building more homes and introducing more initiatives for each stage of the property lifecycle we should start to see more choice for first-time buyers, second steppers and last-time buyers.”

Whilst there have been monthly increases in house prices for the last two months, the annual rate of growth has slowed in England and Wales.

Even excluding London and the South East, the annual growth rate of 2.5% is far below the peak two years ago, which was then at 6.7%.

But other regions remain robust, including the South West and the North West, which now leads the growth table for the first time, with prices here up 4.6% annually. The rate of decline in annual prices seems to be flattening out.

Blackburn with Darwen has seen the biggest increase in prices in the country, up 16.4% annually and Warrington is also seeing double digit growth, with prices up 10.3%.

In terms of price growth, the only region that now comes close to the North West is the South West, where prices are up 4.1% annually. This was driven by a strong performance in North Somerset (up 12.1%) and Bristol (up 9.2%), one of six local authority areas in the region to set a new peak price.

As well as Merseyside and Greater Manchester in the North West, Cardiff in Wales (up 2.8%), the West Midlands conurbation, which includes Birmingham (up 2.4%), and Leicester and Nottingham in the East Midlands (up 4.7% and 4.5%, respectively) all saw prices increase in the last year.

Prices in London fell again in January, down £4,662 or 0.8%, leaving average prices in the capital at £593,396.

That’s down 2.6% annually, the biggest decline since August 2009. Average prices in the top 11 priced boroughs have fallen most, by 3.8%, while mid-priced boroughs are down an average 2.7%.

Wandsworth has seen the biggest fall in the capital, with the average price declining 14.9% to £685,567 from £805,460 a year ago. This is followed by the City, where prices are now £844,768, down 10.8% from last January.

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