Annual property price growth in England and Wales at lowest since 2013
Average prices in England and Wales, excluding new build, reached £254,839 in May 2019, up 0.1% month on month, up 3.5% year on year but down 1.3% on a quarterly basis, according to the latest residential index report.
The report from London Central Portfolio also shows that average new build prices were £303,646, some 15.1% more than existing stock, and up 4.3% year on year. When it comes to sales new build transactions increased by 5.2% while the existing homes market saw sales fall year on year by 0.9%.
Naomi Heaton, LCP chief executive officer, pointed out that annual growth in England and Wales is at its lowest since 2013 and sales have seen a steady decline since the European Union referendum three years ago.
The report also looks at the Greater London market and shows that average prices, excluding new build, reached £628,283, up 1.7% month on month, up 2.5% year on year while sales fell by 3.2%, some 25.6% compared with three years ago.
In the new build market the average price was £764,912, some 20% higher than existing homes. Year on year they increased by 9.8% but sales are falling faster than the rest of the market, down by 14.8% on an annual basis.
Greater London is into its fifth year of falling transactions, with a total drop of 27.4% since 2014. Heaton pointed out that higher purchase costs, political uncertainty and short sighted policies aimed at winning easy votes continue to hamper any recovery.
‘Overall, England and Wales has turned in a more robust performance than the capital in recent times. The high purchase costs that have hit London hardest have not been felt as acutely and with a smaller proportion of investors, transactions have been more resilient,’ she explained.
‘However, any economic fall-out from Brexit is likely to have a far greater impact in England and Wales, which is primarily a domestic market, than in London, where the uncertainty has already been factored in,’ she added.
In the prime central London market average prices, excluding new build, reached £1,913,040, an annual rise of 8.2%, and up 13% quarter on quarter, while sales fell by 14.2% year on year, although quarterly transactions surged by 37.9%.
In the new build market in prime central London average prices were £3,189,795, a 54.5% premium over existing stock but transactions fell by 24.1%.
Heaton pointed out that wait and see attitude, endemic since the EU Referendum in 2016, appeared to start turning ahead of the first Brexit deadline at the end of March with investors wanting to capitalise on weak sterling and discounted prices.
‘Whilst the extension of the deadline appeared to have initially dampened investors’ enthusiasm, there has been a notable change in market sentiment and several estate agents are reporting improved trading conditions. It would appear investors are no longer prepared to sit on the sidelines whilst the UK makes up its mind,’ she said.
‘Historically, the prime central London market has bounced back swiftly when sentiment improves, so the window of opportunity to cut a good deal at rock bottom prices could well be a small one,’ she concluded.