Year-on-year figure shows small increase, but regional variations increasingly mask real picture
House prices in England and Wales fell by 0.3% in October as low levels of activity continued to depress values, according to the latest edition of the Land Registry’s house price index.
The average price of a home is now £161,605, up 1.1% on October 2011. However, the headline figure masks huge regional variations: while prices in London were up by 7% year-on-year, in the north-east homes sold for 5.8% less than in 2011.
In October alone prices in the north-east dropped by 4.2% to an average of £96,061. This is still the cheapest region to buy a property in the UK, while at the other end of the spectrum London, which saw a 1% increase in values in October, now has an average house price of £364,574.
For the second month running the biggest monthly increase in October was seen in Wales, where prices jumped 1.5%. However, earlier in the year prices fell quite heavily, and the annual increase was just 1%.
Recently, the surveyors’ group Rics said its members had reported an increase in buyer inquiries in October, but demand for homes still remains well below the levels seen before the economic downturn began.
Figures from the Land Registry for August, the latest month for which full transaction data is available, showed the number of completed house sales in England and Wales reached 62,291 – the highest level in 2012 but lower than the 64,417 recorded in August 2011.
The number of properties sold for more than £1m was up by 12% on the previous year at 843.
Tracy Kellett of buying agents BDI Home Finders said the low level of transactions made it difficult to judge what was really happening.
“The general picture, though, is of a property market that is flat and under pressure,” she said. “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.”
Jonathan Hopper, managing director of the property consultants Garrington, said: “The recession might be statistically over, but you wouldn’t know it to look at this data. The property market still looks 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.
“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.”
Kellett added: “Barring the most sought-after properties, buyers continue to hold all the cards.”