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The UK housing market has shown remarkable resilience recently, despite the so-called credit crunch…
House prices in England and Wales increased by 0.6 per cent in November, taking the average house price to £186,009, according to the latest monthly figures from Land Registry.
London prices rose by 1.1 per cent – more than any other region – taking the average house price in London in November to £355,643.
The number of transactions during the period June to September 2007 averaged 108,678 per month, down from 119,580 for the same period last year.
Regional variations
- All regions in England and Wales experienced increases in their average price over the last 12 months.
- The region with the highest annual price change is London with an increase of15.6 per cent.
- The region with the lowest annual price rise is the North East, with an increase of 3.3 per cent.
- London experienced the highest monthly rise, with an increase of 1.1 per cent.
- The North East experienced the largest negative price movement this month with a change of -0.9 per cent.
|
Region |
Monthly change (%) |
Annual change (%) |
Average price (£) |
|
London |
1.1 |
15.6 |
355,643 |
|
West Midlands |
1.0 |
5.9 |
156,864 |
|
Wales |
0.7 |
7.7 |
144,895 |
|
Yorkshire & The Humber |
0.3 |
5.9 |
146,961 |
|
North West |
0.3 |
6.3 |
137,529 |
|
South East |
0.3 |
9.6 |
231,321 |
|
East |
0.2 |
8.3 |
195,164 |
|
South West |
0.1 |
7.4 |
197,315 |
|
East Midlands |
0.0 |
4.9 |
146,631 |
|
North East |
-0.9 |
3.3 |
130,574 |
|
Average prices by property type ( England and Wales ) |
November 2007 |
November 2006 |
Difference (%) |
|
Detached |
£277,318 |
£261,220 |
6.2 |
|
Semi-detached |
£175,153 |
£162,900 |
7.5 |
|
Terraced |
£145,704 |
£134,437 |
8.4 |
|
Flat/maisonette |
£175,895 |
£160,155 |
9.8 |
|
All |
£186,009 |
£172,037 |
8.1 |
Nicholas Leeming, FRICS, major clients director at propertyfinder.com, commented: “Today’s data shows the housing market is remarkably resilient in the face of the credit squeeze. Price growth has slowed as buyers and sellers have reached a stalemate, but sellers’ reluctance to accept low offers, indicates we are not in an environment of forced sales.
Financial turmoil has nevertheless impacted on confidence and it will take the market some time to adjust to the government’s chaotic roll out of HIPs – these factors will impact on transaction levels for some months.
The first half of 2008 will see price growth slow to a crawl and the MPC should act sooner rather than later to spur confidence in the market and encourage a recovery in the housing market, one of the engines of the British economy.”
Nationwide: House prices falling
The Land registry figures are in stark contrast to Nationwide’s latest assessment, with the building society revealing that house prices fell for a second consecutive month in December.
Prices dropped 0.5% in December after slipping 0.8% in November, but property prices were still up 4.8% year-on-year from December 2006, it said.
The average price of a UK property rose by £8,334 over the year, putting it at £182,080 at the end of 2007. Nationwide said that this month's interest rate cut should help the market recover somewhat later in 2008. "The housing market has weakened significantly in the closing months of 2007 after holding up more strongly than expected in the earlier part of the year," said Fionnuala Earley, Nationwide's chief economist.
Nationwide data also showed that St Albans was the most expensive place to buy property in a survey of 30 towns and cities.
The average house price in the Hertfordshire town rose 13% to £347,563 over the year. Belfast saw the biggest rise in house prices, up 32% over the year to £306,698 - an increase of £201 a day. Durham and Newcastle saw the survey's only fall in house prices. Average prices fell 3% in both places to £152,902 and £178,309 respectively.
'Worse position'
Nationwide said lower interest rates in 2008 should help demand recover a little, but said it was unlikely that there would be a big recovery like the one seen after the interest rate cut in 2005.
"This is mainly because housing affordability is starting from a much worse position than in 2005, while interest rate cuts have started from a higher and more restrictive level," she said.
The three-month on three-month rate of growth - a smoother indicator of house price trends - fell from 1.4% in November to 0.9% in December, the lowest since November 2005.
Nationwide said the turmoil in the financial markets resulting from the US sub-prime mortgage market, as well as the problems experienced by Northern Rock, had undermined confidence in the property market.
The Bank of England's monetary policy committee voted unanimously to chop interest rates from 5.75% to 5.5% at its last meeting. Many analysts expect further cuts in the new year to support the flagging housing market and the wider economy.
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