Overall, across England and Wales, house price growth picked up on a monthly basis in April, climbing 0.2% but the annual rate of property price growth has halved since last summer, down to 5.3% in April.
The data from the LSL index shows that the average house price is now £275,961, a new high for this year and excluding London the annual growth is 4.1%.
The data also shows that in the first quarter of the year sales were down 10% but the firm expects that to change as the political uncertainty that affected the market in the run up to the general election disappears.
‘Annual price growth is still cooling, but mainly due to some recent negative monthly price rises. The direction of travel is clear and accelerating and most importantly, momentum is picking up where it was lacking before,’ said Richard Sexton, director of e.surv chartered surveyors.
‘By contrast, annual price rises in London have fallen sharply. As a result, the capital has been knocked off its perch by the South East and East Anglia, who have now edged ahead of London with the strongest year on year increase in property values of all regions across the country, at 7.1% and 6.9% respectively. In contrast, annual growth in London has shrunk from 9% in February to just 6.8% in March 2015,’ he pointed out.
‘This is the first time for nearly four and a half years that London has not been leading the pack in terms of regional house price growth, as higher stamp duty rates take some of the shine off high end properties in prime central areas,’ he added.
The data shows, for example, that in the City of Westminster, where the average property is now worth £1,382,965, prices dropped 5.2% during the month of March, as pre-election speculation of a mansion tax put a dampener on enthusiasm for the most exclusive London homes. London also saw the sharpest decline in completed home sales between the first quarter of 2015 and the same period a year ago, falling 16.5%.
‘Election uncertainty has now vanished, so arguably London’s unique property market could see a fresh boost. But this mansion tax effect is one for the very top of the market. Away from the prime hotspots, affordability is still the biggest factor holding back further price rises and owning a London home is still more of a dream than even an aspiration for millions,’ said Sexton.
‘The head start that the housing market in London has traditionally exercised over the rest of the UK is retreating, and more of an even playing field is emerging instead. Average property values also hit new highs in greater Manchester and Birmingham, as demand in other large cities continues to thrive away from the south eastern extremities of the UK,’ he explained.
‘Across the wider market, home sale completions made healthy headway with a 5% uplift in the month to April. However, there was a slowdown when we look at the first quarter of 2015 as a whole, with a 10% year on year drop in the number of homes sold. Activity was certainly more restrained in the months running up to the general election,’ he pointed out.
‘Now a clear majority government has been established, confidence has returned to the market with abandon, and buyers across the country can seize the golden opportunities on offer. With the election done and dusted, and demand certainly bolstered by extensions to schemes like Right to Buy, the only major snag in the fabric of the housing market remains the fundamental flaw of a lack of new homes,’ he added.
