East of England leads house price recovery despite slump in transactions

By Lauren Davidson, Property Editor
January 17, 2017

House prices across England climbed by 7.2pc in the 12 months to November CREDIT: RICHARD GARDNER/REX/SHUTTERSTOCK

The East of England is staging the strongest recovery in the UK housing market, with property prices there 10.5pc higher in November than they were a year earlier, according to monthly figures from the Land Registry.

House prices across England climbed by 7.2pc in the 12 months to November, reaching an average of £234,278, with London prices 8.1pc stronger at £481,648.

“The Land Registry’s data for November shows that buyer confidence is returning to the housing market, underpinned by low borrowing costs," said Katherine Binns, research director for the HomeOwners Alliance.

"While the expected triggering of Article 50 puts a cloud of uncertainty over the market for 2017, people seem to be keen to crack on with their home-moving plans. With a shortage of both sellers and of new homes being built, this means our housing market will continue to be shaped by a lack of supply and we can expect ongoing upward pressure on prices."

On an annual basis, house prices rose across all regions of England and Wales. The slowest year-on-year increase was in the North East, where the average price of a property gained 3.2pc to £126,989.

“Today’s figures from the Land Registry act as confirmation of what we already believe to the true, which is that the UK market remained resolute in the face of uncertainty with price growth continuing to increase late into the year," said Russell Quirk, chief executive of eMoov.

However, the number of sales transactions in England dropped by 22pc in September, the most up-to-date Land Registry figures available, following a 20.3pc fall the previous month.

Just 64,311 house sales were completed in September, down from 82,452 a year earlier. The number of completions in London fell by 39.5pc to 6,698, compared to 11,065 in September 2015.

The precipitous drop in transactions has been attributed to high levels of stamp duty, particularly in London, where houses are more expensive and therefore have a larger tax bill.

A 3pc increase in stamp duty for buy-to-let investors prompted a surge in sales before the changes were introduced in April 2015 and a significant reduction since.

"The bottom line is that demand outstrips supply and so, while interest rates are low, it is likely that the market will continue to grow at this gradual pace – especially in sought after areas such as London," said Simon Gerrard, managing director of Martyn Gerrard and former president of the National Association of Estate Agents.

"However if the Government wants to maintain a healthy housing market post-Brexit, then it is imperative that they work on supporting an increase in the volume of transactions taking place – which is the real issue currently facing the industry."

http://www.telegraph.co.uk/property/news/east-england-leads-house-price-recovery-despite-slump-transactions/