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London Property Prices Show Negative Growth for the First Time Since 2009

January 2015 experienced the most substantial increase in house prices since the summer, but London properties fell into negative territory for the first time since 2009.

The latest figures from the Land Registry show that house prices went up by 1.3 percent in England and Wales, with the average home now having a sale value of £179,492 . There was an annual increase of 6.7 percent, which is a gradual decrease from the 8.2 percent reached in August. The summer figure represented the greatest annual growth since the financial crisis.

The monthly increase was not driven by activity in London, which was one of three regions where property values actually fell. Prices went down 0.2 percent in the capital, while the North East experienced a similar reduction and Yorkshire and Humber saw a 1.5 percent drop.

The North West experienced the biggest increase, with prices going up by 2.6 percent in January. The South West saw a 1.5 percent rise while the East went up by 1.4 percent.

London has not commenced a new year with lowered house prices since January 2009, when the financial crisis caused values to fall by 1.5 percent. But in terms of annual growth, the capital still leads the way with 12 percent value being added in the last year.

The London reductions have been caused primarily by the Royal Borough of Kensington and Chelsea, where prices fell 1.9 percent in January. It is also the only borough to experience single-digit growth over the year, although it remains the most expensive one to buy in, with the average home selling for almost £1.3million. Interest in the area may be waning because the new stamp duty makes it more expensive to buy seven-figure properties.

Outside of London, the greatest increase in house prices took place in Thurrock, Essex, which is within easy commuting distance of the capital. Property values climbed by 16 percent in the past year.

 

Specialists in Construction Insurance

Guy Meacock, who heads the London office for Prime Purchase, a buying agency, said that after five years of steady growth in property prices, there is now a lot of uncertainty. Factors include the general election, proposed mansion tax, and an upcoming rise in interest rates. He predicted that the next six months would see the market improve for buyers.

A report revealed that nearly three-quarters of all properties sold in January did not go for their original asking price. This is an increase from the 56 percent recorded in January 2014.

The National Association of Estate Agents, which compiled the figures, said that it was evident that buyers are once again in a position to negotiate.

Land Registry figures also revealed that in the period between August and November of last year, monthly property sales averaged 79,549. This is an increase from the same period in 2013, when sales averaged 77,694.

In November 2014 the number of homes sold in England and Wales for more than £1 million decreased by 18 percent over the year before. In London, the drop was 24 percent.

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