London house prices growth rate outstrips most regions in February

House prices in the capital were growing at a faster rate than in most regions, the Land Registry House Price Index for February 2015 shows. The prices of housing in London went up by 13.1 per cent last month as compared to February 2014, reaching at average level of £463,872. This is more than twice […]

House prices in the capital were growing at a faster rate than in most regions, the Land Registry House Price Index for February 2015 shows.

The prices of housing in London went up by 13.1 per cent last month as compared to February 2014, reaching at average level of £463,872. This is more than twice the average house price in England and Wales, which stood at £180,252 in February.

Compared to a month ago, prices in London have increased by 0.6 per cent.

The region with the lowest annual price increase, of only 0.7 per cent, was the North West. The biggest monthly decline was also registered here – prices fell by 1.7 per cent compared to January.

Prices in the North East grew the strongest in comparison to January, by 6.2 per cent.

On a national level, house prices grew by 6.5 per cent on the year and by 0.5 per cent on the month in February 2015.

The number of property transactions has decreased over the last year. 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.

Comments

Commenting on the Land Registry data David Whittaker, managing director of Mortgages for Business, said:

“At a time of restrained mortgage lending such strong price growth is a symptom of the other side of the coin – 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.

“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.”

Adrian Gill, director of Your Move and Reeds Rains estate agents, said: 

“House price growth isn’t flexing quite the same muscle as it was a few months ago, but the property market is only just getting into shape for 2015 and our research shows it’s gaining momentum as the weather improves. Overall energy levels appear mixed across the different regions, however buyers are still moving quickly to snap up the best deals on mortgages and prices.

“But we’re on a road to nowhere unless housebuilding speeds up in tandem 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. 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. 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.”

Andrew Bridges, managing director of London estate agents Stirling Ackroyd, commented:

“London property is roaring more loudly, as the streets and offices of the capital feel the pressure of opportunity.  Just as this world-class city demands skilled workers, an all-time record population is clamouring for a place to live.

“Fundamentally, London is still only building half as many homes as it needs. We’re filling every new development, and that doesn’t look like changing.  So while the property market does see fluctuations, even half volume will drive prices higher – and in London the dial can go up to 11.”

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Land Restry data February 2015