What’s happening to property prices to date?

publication date: Feb 21, 2013
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

What’s happening to property prices to date?

Sold House Prices

Even though we are continually hearing about house prices changing, contrary to media reports, there has been very little movement to national average property prices over the past couple of years, as the chart and analysis shows.

Chart showing Average Property Prices December 2011 to December 2012 in England and Wales

Average Property Prices Dec 11 - Dec 12

Key facts about average property prices in England and Wales from December 2011 to December 2012:-

National Averages

  • An ‘average property’ price for mortgaged properties has fluctuated between £161k - £166k for Nationwide
  • Average property prices, including cash sales, by the Land Registry varied slightly between £159k and £163k
  • Average property prices for all properties from Acadametrics shows a range between £218k and £227k
  • Property prices in December, on average, are approximately:-
  • Land Registry average property prices December 2012 versus January 2011 have only changed by -0.6%
  • Nationwide average property prices December 2012 versus January 2011 have only changed by 0.4%
  • Acadametric’s average property prices December 2012 versus January 2011 have only changed by 2.1%

Regional Averages

  • Average property price performance varies dramatically from one area to another with the North East, the North West and Yorkshire and Humber property prices below 2009 levels, according to the Land Registry.
  • Only London continues to outperform 2007 price heights, with prices 5.6% above. Taking into account inflation, this means property prices have recovered in nominal terms, but not kept up with inflation.
  • Northern Ireland continues to be the place worst hit by the credit crunch being -11.4% down on the lows of 2009, and although there was some improvement with Q2 2012 property prices being 3.7% up on Q1, Q3 has dropped back versus Q2 by -0.5%.

Market Commentary
It’s easy to find a way of making headlines to sell papers out of property prices, but the reality is prices have been pretty flat now for two years and they have still yet to recover to 2009 levels in all areas except London. A few areas in London have risen in line with inflation, but in the main house prices continue to deflate.

According to Roger Gardner, Nationwide’s Chief Economist, “While activity in the housing market remains muted by historic standards, there have been tentative signs of a pick-up in activity in recent months. The Funding for Lending Scheme has achieved some success in bringing down mortgage rates, with some signs of a pick-up in lending”.

This quote is backed by their own data and that of the Land Registry which records an annual price increase of 1.7% in England and Wales.

Acadametrics always errs on the side of bullish rises, and their data shows annually, prices have risen by 3.2% which is only slightly above inflation levels. Dr Peter Williams of Acadametrics comments “It has been a year of two halves: in the first six months of the year the index rose cumulatively by a rounded 3.2%, whereas in the last six months the index has remained flat at 0.0% on the same basis”.

Part of the flat numbers are due to a lack of sales volume towards the end of the year with December likely to end up being one of the lowest months for property sales since 1995 when the Land Registry began.

Land Registry also report the number of property transactions decreased during 2012 with the average sales for July to October 2011 being just over 62,000 versus 57,650 for the same period in 2012, a 7% fall.

Moving into 2013, Dr Peter Williams, Chairman of Acadametrics says that “The general view is that transactions will pick up [in 2013], assisted by increased lending, which itself is a product of lower mortgage rates along with an increase in the number of higher Loan To Value products. This should ease access for first time buyers”.

For further in depth analysis by Kate Faulkner, also read:-

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