Latest Prices
According to figures recently released by the Land Registry, house prices in England and Wales were unchanged throughout the month of September, maintaining a rise of 1.8% over the course of the whole year. Whilst prices, therefore, are holding steady the number of houses sold during September were down by almost fifty percent on the same month in 2007.
The Registry said that the annual price growth fell for the ninth month running, confirming reports from lenders and the media that the house market was slowing and continuing towards a possible turn around.
In more specific terms London once again led the way in year-on-year growth in property prices, and similar raises were experienced in the East Midlands, the East, Yorkshire and Humber, the South East and the North West. However, average prices fell over the last 12 months in many other areas such as the North East, South West, Wales and the West Midlands.
The Registry’s figures paint a relatively rosy picture compared to other data put forward by lenders from across the same period. Part of the problem, however, is that nearly any set of figures is calculated by a different method and that the figures are often contradictory.
For example Halifax reported a UK house price drop of 2.4% in May, continuing the lowering of prices which is now at 3.8% less than it was last year, according to their numbers. On top of this Halifax predicted that house prices would drop by 9% this year across the board, which represents a more severe fall than it’s previous forecast. Nationwide Building Society reported similar figures across the period.
The difference between the two sets of figures is that Registry’s figures are based on completed sales across all lenders, whereas Halifax and Nationwide surveys are based on an earlier stage of the buying process. It does, however, mean that the Registry’s figures are affected by different factors that may not be involved in Halifax or Nationwide’s numbers, such as the sale of luxury houses worth over a million pounds of which 357 were sold in May. This number, however is only just over half of the number of luxury houses sold in the same period the previous year.
The drop in the number of transactions is attributed to the international credit crunch which has meant that banks and other lenders have found it difficult to raise money for mortgages on the global credit market. This has been transmitted to the customers in the shape of higher interest rates, which have made buying difficult. Due to the difficulty of buying housing prices have fallen in an attempt to become more affordable, but this hasn’t helped much as people are making less equity of the house that they are selling. It’s a vicious cycle that, for the moment, doesn’t look like coming to an end.
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