The new Land Registry numbers, released at the end of June suggest that UK house prices continue to rise but that this may be starting to slow down.
The overall increase year on year across England and Wales was 6.7 per cent, including a rise of 0.4 per cent in May. The average house now costs just over 172 thousand pounds.
Overall transactions continue to increase, with recorded average monthly sales of 68,000 in the period December to March, which is 36% higher than the same period in 2013. There are however signs that this is starting to slow down, as predictions in interest rate rises and the recent mortgage market review start to curtail demand.
The summary statistics hide a considerable difference between London and the rest of the country. Prices in the capital rose 18.5 per cent in the 12 months to May, whereas the equivalent rise in the rest of England and Wales was just over 6 per cent.
A property in London now typically costs £439,179, more than two and half times the UK average, as demand continues to outstrip supply.
By comparison, five regions across England and Wales actually recorded price decreases of up to 1 per cent in the month. Nevertheless, the district of South Tyneside saw the biggest monthly increase in May of any metropolitan area at 3 per cent, showing that so called ‘hot spots’ exist across the country.
The wide monthly variations within small geographic areas are illustrated by the price increases recorded in May by the London boroughs, which varied between 3 per cent and 26 per cent.
All types of properties experienced rises of 6 per cent or more, but the fastest growing category is flats and maisonettes, with a 9.2 per cent year on year increase, influenced by the number of such properties selling in the capital.
So in summary, the outlook remains positive, but most leading economists are now predicting a slowdown in prices in the next 6 months, and a rise in interest rates either late this year or early in 2015, initially a quart of one percent.
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