Surveyor view
House prices have risen just 1% since 2007 with the average house price now standing at £223,971. The steady UK average figure hides some significant regional fluctuations however. The only regions of the UK to experience any rise in house prices in the last month were London and the South East and the biggest boost to average house prices was the increasing of stamp duty on properties of £1m and more in April. All other regions, without exception, experienced house price falls which ranged from an annual change of just -0.1% in the South West, up to -4.3% in the North West.
When we drilled down into the smaller unitary districts and counties that make up the regions, however, the picture is even more varied, with 76 out of the 106 unitary districts and counties reporting house price falls increased, up from 68 districts in March. There were three notable exceptions outside of London however: in Bath, Darlington and Oxfordshire the average house price reached an all time high and Darlington has seen a record 9.2% annual rise in prices.
eState agency view The number of house purchase transactions in 2011 are noticeably lower than they were in 2010, which was already a slow year for house purchases. There was a significant rise in the number of cash based sales in April, especially in London, mostly due to
the stamp duty increase in properties worth more than £1m which attracted a number of cash buyers.
In the first five days of April, before the rise in Stamp Duty Land Tax, the Land Registry recorded the sale of 491 properties with values in excess of £1,000,001. Incredibly, this exceeded the number of sales normally experienced in a whole month. What makes more interesting reading is the difference made by different property types on the number of transactions. The sale of flats fell by 12% year on year; sales of detached properties have fallen by 6%; while terraces and semi-detached houses have held steady from one year to the next.
Letting agency view Rents rose again this month. The average rent in England and Wales rose by 0.5% in April, reaching £696 per month. This inflation in monthly rents means that they are now an average of £30 or 4.4% higher per month than they were a year ago equalling their all time high.
The rise in rents is good news for
landlords as it means they have a cushion if and when interest rates do start to rise. The rise in rents is fuelled by the
growing number of people looking for rental property; these combined factors are also having a positive effect on landlord sentiment with the recent LSL Landlord Sentiment Survey revealing that 49% of landlords believing
that now is a good time to invest in property, an increase of 47% over this time last year, while just 1% believe now is a good time to reduce their portfolios.
As with house prices, rents in some parts of the country have risen significantly more than others, with London, once again, seeing the largest rises, increasing by 7.8% over the last year to reach an average of £996 in May. The second highest rise is in the North East, where monthly rents increased by 6.4% in the last 12 months to £513, although the rents in the East of England, while being one of only two regions to experience a small drop in rents were the second highest in the country averaging £719 per month in May. n
• Average UK house prices rose by just £20 in May
• Transactions over £1 million accelerated to five times normal pace to beat the stamp duty rise on 6th April
• Rents rose by 0.5% to £696 in May - an annual rent inflation of 4.4%
• Average rental yields remained at the record high of 5.1% that it reached last month
• Total annual returns remained steady at 2.9% as rent rises are balanced by a slight decline in property prices
• 49% of landlords think it is a good time to invest, while just 1% believe now is a good time to reduce their portfolios and 68% of landlords expect tenant demand to grow in next 12 months
mortgage introducer JULY 2011 51
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