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House prices see 5.1% annual rise

Date online: 02/06/2015

On a monthly basis, house prices rose 0.9% since March.

The number of property transactions has decreased over the last year. From November 2013 to February 2014 there was an average of 73,156 sales per month. In the same months a year later, the figure was 64,196. The regional data indicates that London experienced the greatest increase in its average property value over the last 12 months with a movement of 10.9%, while Yorkshire and The Humber experienced the greatest monthly rise with a movement of 2.7%.

North East saw the only annual price fall with a decrease of 0.6%, and Wales saw the largest monthly price decrease with a fall of 1.1%.

Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “House price rises are looking livelier in April, and we’re back in positive territory after a languid period for property values.  Annual growth has been curbed somewhat, but mainly by some short-term hesitation before the General Election – and momentum is now accelerating where it was lacking before.
 
The election rattled the cage of the London market more than others, with the threat of Mansion Tax hanging over high-end buyers, who are already having to fork out more on stamp duty.  Now we’re out of the woods, activity in the capital should start to flourish again.  But in the meantime, London been knocked off its perch by Yorkshire & the Humber, which saw the biggest monthly jump in property values across the country, as activity continued to rumble along in more affordable areas. Election or not, buyers at the bottom rungs of the ladder were looking to seize the low loans and Help to Buy schemes when they can. The restoration of political normality will only strengthen demand, and we’ll soon see this translating into sales come the summer.”

Jonathan Hopper, managing director of buying agents Garrington Property Finders, commented: "This snapshot of the housing market in the final weeks before the general election clearly shows the pre-May hesitation among buyers. The skittish pre-election mood now seems a very long time ago. The political uncertainty, and the potential reforms that buyers faced, led thousands - especially those at the top end of the market - to hold off on their purchases.
 
But while it's no surprise that these Land Registry figures show the number of transactions was down, it is encouraging to see how well prices held up in April. With the month-on-month rate of price growth climbing back up to 0.9% even in the pre-election limbo, the surge of activity we've seen since the vote should see May deliver some strong numbers.
 
In the weeks since the election result the market has quickly become much more free-flowing, with energised buyers and supply improving dramatically.Vendors in some areas continue to test the limits with their pricing, but buyers are highly value-sensitive. Gone are the days of buyers snapping up properties in haste - or stretching their finances to the limit - simply for fear of missing the bandwagon.
 
With lending criteria much more rigid than in the last boom, those buyers with a firm mortgage offer will have less elasticity in their budget. But buyer demand and confidence are robust - both of which bode well for a strong summer moving season."

Jonathan Samuels, chief executive of Dragonfly Property Finance, added: “This latest Land Registry data is a continuation of a familiar narrative, namely the gap between the property markets of London and the South East, and the rest of the UK. The property market in Wales and the North East is a million miles away from the South East corner of England. The sharp drop in sales of £1m+ properties in February compared to the same period last year is almost certainly General Election-related. The higher end of the market clearly sat on its hands.

The broader fall in the number of property transactions over the last year suggests a natural slowdown in the property market after a period of exuberance. Looking forward, activity levels are likely to pick up slightly, in particular at the higher end of the market where fears around the General Election outcome have subsided.

However, don't expect anything dramatic. While interest rates and the cost of living remain low, and employment levels high, there is still caution among buyers.The economy isn't growing as much as we had hoped for either, and Eurozone worries remain in play. There is still a fair bit of uncertainty in the market."

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