Property prices in England and Wales increased by 0.6% in February but the annual rate of growth fell to 2.4%, the lowest since 2013, although some parts of the country are seeing stronger growth.
Indeed the highest price growth for a year was recorded in Merseyside and Birmingham with new peaks of 5% and 6.2% respectively, according to the latest Your Move index.
The average price of a house is now £297,832 and there are signs that London and the South East are now pulling down the national average as when they are excluded from the calculation the annual growth is 3.1%.
While there was a strong performance in the East of England, it was Merseyside that set a new peak price in January with the report suggesting that heavy demand for apartments in Liverpool from both young professionals and buy to let investors renting to students has seen prices rise in Merseyside by 5% in the last year.
Birmingham in the West Midlands also set a new peak in the month and the reports says that ongoing regeneration of the city centre, good connections by rail and road, and expansion of a number of large employers is giving the city renewed confidence. Prices in the area were up 0.4% monthly and 6.2% year on year.
Oliver Blake, managing director of Your Move and Reeds Rains estate agents, believes that it has been an encouraging start to 2017. We’ve seen the strongest house price growth in a year, the emergence of the promised Northern Powerhouse and the first tentative signs of a recovery in the highest priced properties in London,’ he said.
He pointed out that the strong start to the year for house prices isn’t yet reflected in annual figures, which suffer from comparison to price spikes ahead of the last April’s stamp duty hike.
‘When these drop out of the calculation in a couple of months, though, we hope to see the more positive trend. As the recent English Housing Survey shows, the market is supported by increasing numbers of first time buyers and rising transactions in the last year. The increasing contribution of a strong North Western market centred on Manchester, meanwhile, gives hope for more balanced, if modest, price growth going forward,’ Blake added.
The data also shows that the 11 most expensive of London’s 33 boroughs registered an average increase of 0.8% in prices over January, double the average for London as a whole, rising by £7,473.
By contrast, inflation in the cheapest third of boroughs, which drove growth for much of last year, was subdued. Only Havering with growth of 1.7% and the cheapest borough Barking and Dagenham, up 1.1%, recorded growth above 1%. The latter has still posted double digit annual growth at 11.8%.
The report points out that Greater London market still faces challenges and from January 2016 to January 2017 average prices are up only 2.1%, the lowest rise in almost five years. Every borough has also seen a reduction in transactions for the three months to the end of January, compared to a year before, and London has seen the largest drop in transactions in the country with a fall of 22%.
Despite a slowdown, with prices up just 0.1% over the month, the East of England continues to top the table for annual growth, up 5.9%. The London commuter hotspots of Luton, growing 10.4% in the last year, and Essex with a rise of 6% both set new peak prices month on month.
Indeed, with the exception of London, Southern regions are once again driving price inflation in England and Wales. The South East was up 0.6% monthly and 5.2% annually and the South West up 0.6% and 4.7%, meaning are both closing the gap on the East of England.