The monthly change from July to August shows an increase of 0.1% and the most up to date figures available show that during June 2013, the number of completed house sales in England and Wales increased by 1% to 60,168 compared with 59,854 in June 2012.
The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 7.1% while the North West experienced the greatest monthly rise with a movement of 1.3%.
The region with the greatest annual price fall is the North East with a decrease of 2.2% and Wales saw the most significant monthly price fall with a decrease of 2.1%. The data also shows that the number of properties sold in England and Wales for over £1 million in June 2013 increased by 16% to 788 from 679 in June 2012.
The data is published at the same time as the latest index from the Nationwide Building Society which shows that UK house prices increased by 0.9% in September and were 5% higher than a year ago.
According to David Newnes, director of LSL Property Services, owner of Your Move and Reeds Rains estate agents, the property market is returning to more normal levels. ‘What we’re seeing is a relatively normal market correction, not a quick transition from a recession to a boom. Mortgage lending is being done sensibly. There has been no throwback to the 2000s. There is no sub prime mortgage lending, very little lending at high salary multiples, and high loan to value lending is still well below the levels seen in 2007,’ he explained.
But he also added that caution and responsibility are the watchwords of the modern housing and mortgage markets. ‘There are still several issues to address if we want the housing market to remain affordable for everybody: the first is ensuring the improvements in mortgage lending and housing availability are happening nationwide, rather than just in London and the South East. At the moment, the capital is rocketing ahead of the rest of the country, which is making the recovery appear more spectacular than it actually is,’ said Newnes.
‘But the main issue is the lack of housing. There is simply nowhere near enough supply to meet demand, which threatens to price the next wave of first time buyers out of the market by pushing house prices up to unaffordable levels,’ he added.
The figures paint a positive picture of the UK housing market as it continues its steady recovery, according to Peter Rollings, chief executive officer at Marsh & Parsons. ‘The improving economy, Help to Buy and low interest rates are having a knock on effect on the property market, with stable price increases and a reduction in the number of repossessions all pointing to a wider economic recovery,’ he said.
But he warned that in comparison to the rest of the country, the annual price increases for London are on completely different plain.‘London is a market within a market, where the price of property bears little relation to wages and affordability. An imbalance of supply and demand means that property is changing hands in record time and for close to the asking price,’ he explained.
And he added that the entire UK property market should not be judged on what happens in the capital as the London property market has always operated on a very different level to the rest of the UK. ‘While interest rates remain low, prime London property will continue to be seen as an attractive investment opportunity for both UK and overseas buyers, and competition for properties will remain high,’ he added.
It is clear that optimism is spreading in the housing market, said Paul Hunt, managing director of Phoebus Software, adding that positive house price growth shows the housing market is taking steps towards recovery. ‘The transformation has been sparked by a significant improvement in mortgage lending to first time buyers, which has allowed many people to make their dreams of homeownership a reality. Lenders have been innovative in their approach to lending which has supported a wider spectrum of borrowers. Without doubt, the mortgage market is more accessible to first time buyers and the choice of mortgages available to borrowers is at its highest since the financial crisis,’ he explained.
He added that the Government’s flagship Help to Buy and the Funding for Lending schemes have provided significant support in pushing the market forward.
