The data has revealed that the rate of annual growth has fallen consistently since August and now stands at just 0.9%, well below the rate of inflation, and the lowest since April 2012. It leaves the average price in England and Wales at £305,522, up £2,724 on the same time last year.
Despite weak price growth, transaction levels rose slightly in November, up 2.5% on a seasonally adjusted basis. With an estimated 82,500 sales, they are at their highest for the month in three years.
Oliver Blake, Managing Director of Your Move and Reeds Rains estate agents said: “Despite the current economic uncertainty it’s encouraging to see that there is still some increase in transaction levels and that, whilst house price growth is relatively flat, it means for first time buyers, for example, the news remains positive.”
In the year to September, while the number of loans for first time buyers was up marginally (0.4%) on the same period last year, the number for home movers is down 3.6%. Perhaps most tellingly, the number of buy-to-let mortgages is down 13.0%. This could be an indication that a ‘wait and see’ attitude is now being adopted particularly as the end of the year approaches and the nation waits with bated breath on the outcome of Brexit.
Longer-term issues also play a role, however, and affordability remains a key concern. The biggest growth in transactions has been in the cheapest region in England, the North East, with transactions in the three months to October up 7% on the same period last year. By contrast, the South East (the most expensive area outside London) saw transactions fall 4%. The capital bucks the trend, with sales up 2%, but it also saw price falls earlier than other regions.
More widely, the Resolution Foundation’s report on the Bank of Mum and Dad (BOMAD) earlier this month shows the continuing difficulty the young have funding their own property purchases. It showed that those without parental property wealth are, at the age of 30, roughly 60% less likely to be homeowners than those whose parents are homeowners.
The average price in London rose 1.3% in October to remain 0.8% up on the same month last year – nominal growth but a real fall compared to inflation. The average house in the capital was priced at £622,508.
On an annual basis prices fell in 21 of the 33 London boroughs, with the City of London, up 7.8% leading those that bucked the trend. Three of the top five priced boroughs recorded double digit falls: in Kensington and Chelsea, the most expensive borough, prices are down 16.5%; in the City of Westminster 24. 8%; and in Hammersmith and Fulham, 10.5%.
On the other hand, in both Merton and Lambeth (ninth and tenth place, respectively), prices continue to grow strongly, up 7.5% and 7.6%.
Overall, there are pockets of strength and weakness across London. Prices in Tower Hamlets are down 13.7%, for example, while in Hackney they’re up 5.6%, with both areas roughly mid-table in terms of prices. At the lower end of the market, Bexley and Barking and Dagenham still show nominal growth (albeit of just 1.7% and 0.7%, respectively), while Newham has seen prices fall 6.7%. Largely, however, areas to the east of the capital, where properties tend to be more affordable, are most likely to be seeing modest growth.
The top three regions for price growth remain unchanged this month. The West Midlands still leads the way with annual growth of 3.7%, supported by strong performance in the West Midlands combined authority, which includes Birmingham. With price up 5.3% annually it’s among 13 areas to set a new peak in the month.
Neighbouring East Midlands, meanwhile, is also growing strongly, up 3.5% annually. Rutland has seen growth of 10.8% over 12 months, while Derby (up 6.1% annually), Leicester (5.7%), Nottinghamshire (3.9%) and Nottingham (2.0%) all set new peak average prices.
Despite the performance of Rutland and others in the Midlands, it is Torfaen in Wales that has had the highest growth in prices over the last year, however, up 15.6% annually. That is helped by the recent sale of the highest priced property in the area this year, for £620,000 in an area where the average property costs just £171,708. It’s also supported by demand for properties from those working in the Bristol and Gloucestershire areas.
More generally, Wales also continues to be the only area outside the Midlands that is (just) outpacing inflation (2.2% in October), with prices up 2.7% annually. As well as Torfaen, it has seen strong growth in Caerphilly (up 8.8% annually), Carmarthenshire (7.2%) and Powys (6.4%), all of which set new peak average prices. The big cities of Newport (up 6.2%) and Swansea (up 3.7%) also show above average growth for the region, although Cardiff prices are only up 2.2% annually.
At the other end of the scale, prices in the East of England are now down on an annual basis for the first time since March 2012. While Southend-on-Sea and Thurrock still show good growth (4.1% annually for both, with the latter recording a new peak), that’s more than offset by falls in Suffolk (down 0.8%), Luton (down 1.0%), Bedfordshire (1.3%) and, most significantly, Cambridgeshire (with prices down 4.6%).
It is, however, the only region to see prices falling on an annual basis, and the majority of unitary authorities continue to see growth, with prices up in 74 of the 108 of them in England and Wales outside London.
