Average house prices in England and Wales increased by 0.5% in January, the biggest rise in five months, with several places reaching new peak average prices, the latest index shows.
The North West has the highest annual price growth at 4.6% and the East Midlands, the South West and Wales also recorded new peak average prices with growth of 2.5%, 4.1% and 3% respectively.
However, overall annual price growth continued to slow, slipping to 0.6% from 0.7% in January 2018, the LSL Property Services/Acadata monthly index shows. And the South East and London are weighing on the market. If they are excluded annual price growth reached 2.5%.
It means that the average value of a home in England and Wales is now £299,556, up £1,512 compared to one month earlier, and up £1,700 compared to a year ago
The slowdown in annual growth began in London and this has now spread to the South East and North East, according to the index. All three have seen prices fall on an annual basis, down 2.6%, 0.5% and 0.7% respectively.
Even excluding London and the South East, the annual growth rate of 2.5% today is far below the peak recorded two years ago in February 2016 which was then at 6.7% or 9% including the capital and South East, which were then powering growth in the market.
But the report says there’s reason for optimism as regions like the North West leading growth for the first time and overall the rate of decline in annual prices seems to be flattening out.
Just eight months ago, the North West was trailing every other region bar one. Darwen in Lancashire has seen the biggest increase in prices in the country, up 16.4% annually and Warrington is also seeing double digit growth with prices up 10.3%.
Major conurbations in the North West are also performing strongly. In Greater Manchester prices are up 4.3% and in Merseyside prices have increased 8%. The report says the region is playing an increasingly important part in the housing market of England and Wales as a whole.
The only region that now comes close to the North West is the South West, where prices are up 4.1% annually, driven by strong performance in North Somerset with growth of 12.1% and Bristol up 9.2%, one of six local authority areas in the region to set a new peak price.
While growth in Bristol was particularly strong, it was not unusual set against the other cities of the UK regions. As well as Merseyside and Greater Manchester in the North West, Cardiff in Wales was up 2.8%, the West Midlands conurbation, which includes Birmingham up 2.4%, and Leicester and Nottingham in the East Midlands up 4.7% and 4.5%, respectively.
Prices in London fell again in January, down £4,662 or 0.8%, leaving average prices in the capital at £593,396. That’s down 2.6% annually, the biggest decline since August 2009. Average prices in the top 11 priced boroughs have fallen most, by 3.8%, while mid-priced boroughs are down an average 2.7%.
At the top, Wandsworth has seen the biggest fall in London with the average price down 14.9% to £685,567 from £805,460 a year ago, followed by the City, where prices are now £844,768, down 10.8% from last January. The cheaper boroughs have fared better. More than half have seen price rises over the year, led by 4.5% growth in Bexley, which, with an average price of £363,082, still has the cheapest property in the capital outside Barking and Dagenham at £300,627.
There are signs of momentum returning to the top of the market, however. Prices in Kensington and Chelsea are still 4.6% up on an annual basis, at £2,162,671, the biggest increase in the capital other than Brent, where prices increased 8.5%.
More significantly, looking at transactions, while sales in London for the three months from November 2017 to January 2018 are down overall by 5% compared to the same period last year, Hammersmith and Fulham and Camden bucked the trend. Transactions saw the largest increases in London, up 17% and 13% respectively. The boroughs are also ranked fourth and third, respectively, by price.
‘When examining the bigger picture, house prices are steadily balancing to meet the needs of house buyers which is welcome news for those looking to take their first steps onto the property ladder,’ said Oliver Blake, managing director of Your Move and Reeds Rains estate agents.
‘However, housing supply in the UK isn’t meeting demand and there is still a bottleneck of available properties. The industry needs to work together to provide a long term solution to increase movement within the market. By building more homes and introducing more initiatives for each stage of the property lifecycle we should start to see more choice for first time buyers, second steppers and last time buyers,’ he added.