Land Registry: prices finally above pre-slowdown leve...

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29 July 2015

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Land Registry: prices finally above pre-slowdown level

Data for June from the Land Registry shows that the annual price increase of 5.4 per cent takes the average property value in England and Wales to £181,619 - finally overtaking the previous pre-downturn peak of £180,983 recorded in November 2007.

The monthly rise in June was 1.1 per cent.

Unsurprisingly the region with the largest annual price increase is London, up 9.2 per cent but the region with the largest monthly rise in June alone was north east England, up 3.0 per cent.

Prices in Yorkshire and The Humber actually fell slightly in June, down 0.9 per cent, contributing to the modest annual performance - a rise of 1.4 per cent, the smallest rise of any region in England and Wales.

Land Registry data for April this year - the most up-to-date available - show that the number of completed house sales in England & Wales decreased 19 per cent to 57,180 compared with 70,244 in April 2014.

The number of properties sold in England and Wales for over £1m decreased by 22 per cent to 874 from 1,114 a year earlier

Repossessions decreased by 48 per cent to 505 compared with 974 in April 2014.

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- R M
- 29 July 2015 06:42 AM
A detailed look at the figures shows that in many of the lower index areas (outside London &SE) the numbers are still below peak prices but in the high index areas the figures are well above the previous peak. It is a distorted average.

Although the average is higher, being 16% over inflated in some areas and 23% under inflated in others is actually not a good situation to be in. The booming market runs the risk if bust and the bust market can look forward to windfall but only if the boom area doesn't bust. In other words it will be the early movers who get out while the going is good that will benefit. Little chance of that now the Telegraph have been telling London to sell ahead of the interest rate rises which are going to catch out those with over extended mortgages.

An 80% mortgage on property over inflated by 16%? I am not sure I would be hanging about! certainly not when a 0.5% rise in interest rates mean the interest element of a mortgage will double.

- Glenn Ackroyd
- 29 July 2015 09:48 AM
Hi Robert, you're right to be cautious about interest rate rises, but these will halt the pace of growth rather than result in a 2008/9 crash.

A most people have mortgage which is 2-3% above the BOE base rate. So at their standard variable rate, they will be paying around 3-4% currently.

So a 0.5% base rate increase on top with make them wince, but it does not amount to a doubling of their payment (admittedly it does double the BOE element).

Carney's mood music suggests that rates will settle around 2.5-3% - possibly 5 years out. That will mean people are paying around 5-6% including the banks margin. That is a doubling!

Those with pre 2008 mortgages will be used to these rates. Those with more recent mortgages should have been stress tested.

Certainly this will take a lot of momentum out of the market. The big issue as ever is supply... We need more houses.

- Daniel Roder
- 29 July 2015 10:04 AM
Interesting insight, Glenn. As you say, for all the hoopla over interest rates rising, the main issue is still supply and the severe lack of it. This, in turn, is putting undue pressure on the PRS.

We need more houses, but I don't have much faith in the government to follow through with their promises, especially given how they've ignored housing since they've achieved that unlikely majority.

- 29 July 2015 15:15 PM
Fantastic to see the property figures picking up, but the government really must make some changes to ensure that the supply of homes meets demand, and then need to do it fast.