Strongest Growth in House Prices for Nine Years
According to the latest figures, house prices are still continuing to grow at a steady pace. In some areas, we have seen above average growth in prices, which has led to the overall rate rising to its strongest level in more than nine years.
Data from the LSL Property Services/Acadata index has shown that in November prices for properties across England and Wales grew by 0.8%. Growth was seen in each of the regions, but some areas recorded significantly higher levels than others. This has resulted in the average property now being worth £280,733, which is the first time it has gone over the £280,000 barrier.
Alongside growth for last month, these new figures indicate that the annual rate has risen to 11.3%. This was pushed up by higher than average levels of growth in the South East and London. When these areas were taken out of the equation, the rate of increase dropped to 5.7%. However, this is still a healthy level and the growth rate is now at its strongest since 2005.
Reduction in Completed Sales
There may have been a rise in the price of properties, but over the last month we have seen a reduction in the number of house sales that have completed. October had been a particularly busy month across both England and Wales, so it was expected that the data for November would be lower. However, the actual figures for the last month are below the rate we saw last year.
This could be an indication that there has been a reduction in the supply of suitable properties, especially at the bottom end of the market. Figures released by Reeds Rains and Your Move show that there has been a fall of 12.3% in the number of completed transactions by first-time buyers in the past three months.
There has also been a decrease in lending to those requiring a high loan to value mortgage. According to information from the most recent Mortgage Monitor report, borrowing in this sector fell by 12% over the last year. Both of these elements will have the effect of stalling sales at one end of the market, preventing people from selling their properties and moving up the ladder - maybe to a property with helical staircases.
However, strong property prices and other elements that will come into play, including changes to the Stamp Duty thresholds, should see the housing market enter 2015 in a strong position.