This takes the average house price in England and Wales to £180,252 but sales have slowed. From September 2013 to December 2013 there was an average of 77,174 sales per month. In the same months a year later, the figure was 75,553.
In London prices increased 0.6% and are up 13.1% year on year. The average price of property in the capital is £463,872, the data also shows.
The North West saw the lowest annual price growth 0.7% and the North East experienced the greatest monthly price rise with a movement of 6.2%. The North West also saw the largest monthly decrease with a fall of 1.7%.
On a local authority basis Bracknell Forest experienced the greatest annual price increase in February with a rise of 14.5% and Gwynedd saw the greatest annual price fall with a fall of 3.6%.
County by county Ceredigion experienced the strongest monthly growth with an increase of 4.6% and Torfaen saw the most significant monthly price fall with a fall of 2.6%. Four counties and unitary authorities saw no monthly price change.
The metropolitan district with the largest annual price increase is Salford rising by 11.7% while Newcastle upon Tyne experienced the highest monthly price rise, with an increase of 2.7%. Bolton saw the greatest annual price fall with a movement of 2% and Sandwell saw the greatest monthly price fall with a decline of 2.6%.
In London the borough with the highest annual price rise is Newham with an increase of 21.4% and Brent experienced the highest monthly increase with a rise of 1.9%. Kensington and Chelsea saw the lowest annual growth of 7.8% and Hackney had the greatest monthly fall with a decline of 1.5%.
The index also shows that price index volatility is greater in areas where recorded sales volumes are low. Index volatility leads to erratic and high changes in reported price. Some of the areas that typically have very low transaction volumes include City of London, Rutland, the Isle of Anglesey, Merthyr Tydfil, Blaenau Gwent, Ceredigion and Torfaen.
The number of properties sold in England and Wales for over £1 million in December 2014 decreased by 4% to 929 from 967 in December 2013 and the number of properties sold in London for over £1 million in December 2014 decreased by 6% to 621 from 622 in December 2013.
David Whittaker, managing director of Mortgages for Business, believes that the index shows that there is a serious lack of supply. ‘That raises the continual spectre of many households being priced out of homeownership, and puts the spotlight clearly on the private rented sector,’ he said.
‘The longer the housing shortage continues, the more it will be left up to Britain’s landlords to fill the gap. As we approach a general election it will be particularly interesting to see how political parties plan constructively to help boost this industry which now houses one in five households,’ he added.
According to Peter Rollings, chief executive officer of Marsh & Parsons, buyers are finding it easier to keep pace with steadier house price growth, and some of the most daunting obstacles to buying have been lowered. ‘The Help to Buy ISA and reduced stamp duty costs will make it faster for aspiring homeowners to save enough to get onto the ladder, and low mortgage rates are also accelerating demand,’ he said.
He pointed out that London, the lynchpin at the heart of the country’s property growth, is where the most acute supply and demand imbalances have collided and this has lifted price rises in the capital to heights unfathomable to the rest of the UK.
‘But the dust is starting to settle, and growth is climbing down to healthier altitudes. This is giving London buyers some welcome breathing space and boosted confidence which in turn will allow activity to flourish into 2015,’ he added.
Adrian Gill, director of Your Move and Reeds Rains estate agents, pointed out that house building needs to catch up with demand. ‘There needs to be a steady flow of new homes to buy to avoid a build-up of pressure at the entry level of the market, and prevent prices accelerating too quickly,’ he said.
‘The new Help to Buy ISA and stamp duty cuts have enhanced the prospects and confidence of thousands of aspiring buyers at the lower rungs of the ladder. But the sticking point is that there aren’t enough homes available for them to buy, added to which the government has further roused demand with their shake-up of pensions,’ he explained.
‘First time buyers will increasingly find themselves up against budding landlords, as investing in buy to let becomes a popular alternative to annuities. Ultimately, the winners will be those who act decisively now to take advantage of these prime conditions as those who delay will end up either paying more or finding that there is nothing left for them to buy,’ he concluded.
