Prices were up 0.7% in October and 10.5% year on year but this annual figure drops to 5% if data from London and the South East is excluded.
It takes the average house price to £277,390 and average house prices across England and Wales have reached a new record for the sixteenth successive month.
The data also shows an uplift in activity outside of London has helped drive the highest number of completed home sales in seven years but prices have fallen at the top end of the London market.
‘This increased level of house sale completions marks a considerable, though laborious, reflection of the increased buyer activity earlier in the year since the recession zapped the energy from the market,’ said David Newnes, director of Reeds Rains and Your Move estate agents.
‘October saw the highest level of house sales completed in a month since November 2007. In part this was driven by a better throughput of sales that had sat in the pipeline for some time, finally coming through to completion,’ he explained.
‘On a monthly basis, house price inflation has edged up from just a 0.3% increase in September, as we see some modest growth. Recent hiccups in the market have not shaken the overall underlying stability and the average UK home owner has seen the value of their property rise £26,500 or 10.5%) in the past year,’ he explained.
He also pointed out that the biggest uplift in completions in the third quarter of 2014 compared to the same period of 2013 has been witnessed outside of London. Indeed, completed house sales in both the West Midlands and East Midlands have risen 22%, while in London house sale completions are up by just 3% over the same period.
In regions such as the North and East Anglia, which saw average house prices slump during September, further growth in activity is critical to warm up the local recovery. First time buyers in particular need shielding from any future cooling interventions from the government or Bank of England.
However, the regions have seen a more complex path of growth. Only three regions saw house prices set peak highs. These were the South West, South East, and London as the recovery continues to advance with a Southern leaning slant.
‘If we omit London and the South East from our calculations, a milder 5% annual change in property prices emerges. Yet at the very top end of the housing market in prime central areas of London, growth is subsiding. Average house prices across London overall rose by only 0.4% in September, the smallest monthly increase the capital has seen for 15 months as the pace of price inflation cools down from the summer heat,’ said Newnes.
‘Property prices have dropped in six out of the seven most expensive boroughs over the course of the last month, in exclusive sought-after enclaves such as Westminster, Richmond and Camden. But just as London bucks the countrywide trend, the city does not behave as one uniform entity. In lower priced boroughs such as Lewisham and Haringey, prices have continued orderly progress in October,’ he added.
According to Peter Williams, housing market specialist and chairman of Acadata, the interesting question is whether prime central London is leading the way in the housing market, with the rest of the country to follow over the next few months, or whether prime central London is a law unto itself, and is an irrelevance as far as the rest of England and Wales is concerned.
‘The answer to this question is likely to have considerable political significance, especially with a General Election only some six months away,’ he said.
