Latest data from the Land Registry shows that things are starting to slow down and even the powerhouse of property prices: London has shown prices are still growing – but at a slower pace.
Data shows the average house price in England and Wales is now £177,299 compared to the highest levels ever seen six years ago in November 2007 of £181,324. This is a rise year on year of 7.2%, but that’s a small fall in growth since last month. And not everyone is benefiting from rising prices as 863 were sadly repossessed and lost their homes in July 2014, although this is 33% lower than last year when 1,283 homes were repossessed. Twenty two percent of those repossessed were in the North West, with Yorkshire and Humber the next top spot for repossessions.
Some good news all-round though, although property prices will always go up and down, it’s the volume of sales which affects the economy as people spend a lot of money when moving and around £8,000 in the first two years they move in. So, good news that actual transactions increased by 7% year on year with numbers heading back towards pre-credit crunch days, with nearly 80,000 properties changing hands.
But not every price bracket sold well in July 2014. We sold 30% less properties priced at under £150,000 and a staggering 37% less homes under £200,000. In fact, it seems only the rich and wealthy in England and Wales seem to be on the move lately. To see sales growth year on year, you need to spending more than £400,000 (up 6% year on year) while sales of properties of £500-£600k are up 20% and those worth one million or more selling 19% more than they did last year!
Regionally, while London still saw growth of 18.4% year on year, in contrast, Yorkshire and Humber saw hardly any growth year on year at all, just 1.4%, this including prices falling by 2.2% in the last month, reversing previous annual gains. Of the 10 regions covered by the report, seven showed monthly falls, although all saw a a rise year on year.
Areas with average property price under the 1% stamp duty include Wales, the North East, North West and Yorkshire and the Humber. Although the highest average is a staggering £460,000 in London, this is a bit of a nonsense figure as it’s an average of the likes of Kensington and Chelsea at over £1.3 million to Barking and Dagenham at £262,000. However one problem in London is the lack of new first time buyers coming through. This, I think is mainly a problem around stamp duty. Most First Time Buyers don’t pay any stamp duty outside of London, but when everyone of the 32 boroughs is seeing their average price go above the £250,000, 3% stamp duty mark, this is a huge tax to have to pay.
Someone buying a property at £249,000 would pay out 1% stamp duty at £2,490, plus other costs, the price of buying is around £5-6,000. Over £250,000 they would have to pay 3% stamp duty, so at £251,000 this would be £7,530 plus other expenditure of £2 to £3,000, so first time buyers would have to find twice the savings – very unfair on hard working Londoners!
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