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Property Price Growth No Longer Strongest in London
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Property prices in the UK rose by 7.2% in the year to February 2015, an Office for National Statistics (ONS) report reveals. This is another indication that the market is steadying.
In January, prices had increased by 8.4% yearly. There has been a slow decrease in annual house price growth since a peak of 12.1% in September last year.1
Fuelling this slowdown is the recent weakness in London. The report reveals that property prices in the capital are still 9.4% higher than the previous year, but this is the slowest yearly rise for a while. London prices are 2.4% off the record high seen in August 2014. Last month, the capital’s annual increase was 13%.1
Property Price Growth No Longer Strongest in London
Average prices in London dropped to £490,000 in February, a decline of £9,000 from January1. This could be a consequence of the slowdown of activity following a spree due to Stamp Duty changes in December. There are also concerns over the possibility of mansion tax on properties worth over £2m under a Labour government.
The East of England and Northern Ireland have surpassed London’s increases in the past 12 months, with 10.7% and 14.2% rises respectively.1
The differences between regions could be down to the huge increases that London experienced in January 2014, as this date is just out of the yearly comparison.
Prime London property is being sold at a slower pace due to the Stamp Duty reform. After the December changes, those buying a home for £937,000 or over face higher Stamp Duty. In the first quarter (Q1) of 2015, there were just 638 prime London sales, down from 949 in Q1 2014, found commercial property company DTZ. This is a drop of a third.1
The strongest growth in the UK was in Northern Ireland, where prices grew by a huge 14.2% annually to February. The East of England’s 10.7% increase was also ahead of London. This means that in this region, property prices have risen to record highs. No other region in England is at a record level.
Director at Legal & General Mortgage Club and Housing, Stephen Smith, says: “House price growth has slowed since the end of 2014. Although it might not seem like it, this is actually good news for the housing market, as price rises that are too sharp can prevent people from getting on the property ladder.
“Ideally, house prices would grow at roughly the same rate as inflation, so that prices don’t rise faster than potential buyers can save a deposit. One way to achieve this goal is to build more houses, so that demand keeps pace with supply.”1
Not including London and the South East, prices in the UK rose by 5.9% in the year to February 2015. Prices in England increased by 7.4%, 1.1% in Wales and 6.4% in Scotland. Overall, the average property value is £268,000, from £252,000 last year.1
The ONS report says: “Annual house price growth is showing signs of slowing across the majority of the UK.”1
