Historic Price Data

publication date: Aug 9, 2011
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Historical Property Prices

Historic Price Data and Market: June activity shows mixed picture

Latest reports for last month's (June's activity) shows a bit more overall activity than May but the market and the historic figures from the different surveys show anything from a -1% fall versus last year to a 1% rise. This may well just be due to all the figures and transactions not yet being recorded.

Average House Price- England & Wales







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Comparing this year's prices to the last 18 months, Acadametrics claim "modest gains in house prices over the last eighteen months have disappeared" and this certainly seems to be the case, although the good news is prices have not slipped back to their previous lows of 2009. Overall, according to each of the reports, May or June prices are 12% away from the heights of 2007 and lows of 2009.

Part of the reason for a bit of a boost March/April time appears to be due to the boost in sales of properties over £1million to avoid the move from 4% to 5% in Stamp Duty. Acadametrics analysis estimates "this increase in high value sales increased their average house price by approximately 1.1% in March 2011". Without this surge they believe house prices would have fallen.

As prices were ‘boosted' during this time, they now appear to be ‘falling' in comparison.

Nationwide's latest report for June figures agrees with Acadametrics and they state "house prices are lower than one year ago across all regions except London". This isn't a surprise. There is less money in the economy this year due to the cuts starting to hit. Confidence is wobbling with the Euro situation and Greece making people nervous, no-one ever likes having unknown variables such as a war (Libya).

Rather than report from the figures each month saying whether figures are a fraction of a percentage up or down, the more useful information for consumers thinking of buying or selling property is the conclusion that the market is ‘bumping along on the bottom'.

This is brilliantly illustrated by Nationwide's latest quarterly house price index update:-

Nationwide Q2 House Price Index 2011

Source: Nationwide Q2 2011 House Price Report 

So house prices continue to be in the ‘doldrums'. This in itself shouldn't be an issue for sellers as long as they have enough equity to move if required and its certainly good news for buyers. From an affordability perspective, Acadametrics point out "While prices rose by 79% in the five years to 2006, they have increased by only 11% between 2006 and 2011." The critical point they make is "in the last five years house prices have grown more slowly than inflation which has risen by 17% since 2006 and salaries have increased by 15%". The longer this goes on for, the more affordable homes will become to first time buyers.

The one area that does seem to have picked up over the last few months which has shown most during June is buy to let. With lenders realising that instead of being a major risk, most buy to let landlords have survived the credit crunch better than most homeowners. The increasing stock shortage in the tenant market helps reassure lenders that they are lending for the long, not the short term. As such, according to The Council of Mortgage Lenders, "New buy-to-let mortgage lending in the first three months of 2011 totalled £2.9 billion across 27,600 loans".

The number of buy to let loans now stands at 1,313,200 (Source: CML, March 2011) and buy to let now "accounts for 12.3% of total outstanding mortgage lending by value, and 11.6% of mortgages by number".

However, new to buy to let investors need to be aware that the great capital growth experienced from 2000 to 2007 is unlikely to return for some years, if at all. There are many so called ‘property investment companies' out there who will charge thousands of pounds to sell you supposed ‘below market value' deals and ‘no money down deals'. Most of these companies and their deals are not realistic. They have been, are and are likely to just take your money and run. Anyone new to buy to let should make sure they talk to local letting and estate agents for help and independent property investment specialists such as Designs on Property instead. It is imperative to purchase a buy to let investment with local research from local property professionals, not from companies selling investment properties on-line.

In summary, from June's figures, it suggests that we have and continue to ‘bump along' a current market bottom, with volumes and prices varying from growth to falls one month to the next. Over time however, this seems to be establishing a flat trend for 2011, albeit at prices below 2010.

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