Prices rising but transactions sluggish, warn estate agencies

Another house price index has suggested a strong mainstream housing market but a struggling one at the high end.

The latest LSL Your Move/Reeds Rain index shows the annual rate of house price inflation across England and Wales running at 5.2 per cent - the highest since early spring. Average property prices jumped £2,500 in October, equivalent to £80 a day.

The price revival has been driven by Greater London where prices have risen by an average of £24,636 in the last year. Most of the recent price increases have emanated from the lower rungs of the market with Harrow, Newham and Barking and Dagenham showing the strongest annual growth. 

However, the agencies report that sales of homes worth over £1.5m are down no less than 35 per cent year-on-year - they blame stamp duty.

“This has been the best October for house sales for eight years, with 88,000 sales taking place during the month, up 9.0 per cent since September. Regionally, the pattern of the sales is the reverse of what we’re seeing in house prices, with activity increasing fastest in the North, Yorkshire and Humber and North West, but falling in the southern half of the country" according to Adrian Gill, director of Your Move and Reeds Rain.

"Supply of properties on the market seems to be the sticking point for sales growth, and activity in the northern most regions of England is also being facilitated by more affordable prices. With low interest rates now likely to be prolonged into 2017, there should be plenty of momentum to encourage further activity. But so far in 2015, total sales are still 4.0 per cent down on last year, due to a slower first six months" Gill says.