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Thursday, May 12, 2016

Property price growth at 8.9% say LSL

LSL April 2016 House Price Index has the annual property price growth rate for England and Wales at 8.9%, although the agents did report approximately 20,000 fewer sales in April 2016 than usual, following a March rush to beat the stamp duty deadline.

LSL director, Adrian Gill, comments: 

“Homeowners have been basking in the spring sunshine this April, on the back of the fastest year-on-year growth in property prices since December 2014. The typical home in England and Wales is now worth £24,280 more than a year ago, with property prices rising 8.9% since April 2015 – meaning they now stand tantalisingly close to £300,000. This acceleration in home values comes when many had expected house prices to dip due to a natural decline in demand from buy-to-let and second home buyers. 

However, after an exceptional March, there is now a severe shortage of properties on the market, with fierce competition between buyers for each available property. Clearly, the Government’s offensive against landlords has not eased the way for other buyers, as property prices continue to pick up pace – growing by nearly 50% over the past seven years, with prices rising from £204,875 in April 2009 up to £298,030. With the maximum value of the government’s flagship starter homes capped at £250,000, first-time buyers may soon see a lot less property for their money. George Osborne needs to increase incentives to sell and relax planning restrictions if he truly wants to fulfil the homeownership dreams of young people.

London has led the way this April, with the value of the average home in the capital breaking through the £600,000 barrier for the first time. Property prices in London have seen an 11% (£59,605) upswing year-on-year, surpassing all other regions. This rapid growth means the average house price in London has almost doubled over the past seven years, rocketing up from £321,917 in April 2009. In Waltham Forest, the average house price has soared by 113% over this time period – more than any other London borough. These kinds of huge hikes in home values in London mean that Sadiq Khan will now face a serious challenge to deliver his promise of increased affordable housing in the city. Across London, it’s been the more affordable areas which have seen some of the steepest increases in house prices annually, as the capital’s residents seek out cheaper properties.

While London may have seen the biggest boost in house prices this month, property values have hit new records in nine of the ten regions in England and Wales, as growth ripples out from the capital. This is the first time nine regions have broken records in the same month since October 2007 at the height of the boom – as the market has now fully recovered from the crash. For those looking for houses to buy, the North East offers the most affordable options, home to the lowest average property values in England & Wales and the only region where house prices haven’t set a new peak in April.

Property sales have slowed in April, readjusting after the rush of interest from landlords in March. With an additional 30,000 home sales made in the previous month and buyers snapping up most of the properties on the market, the current pause in transactions was to be expected. While March saw a record 97,500 home sales – the most since November 2007 – this April there will have been an estimated 20,000 fewer sales than usually expected for the month. Many homeowners may now decide to wait until after the EU vote before selling their homes, despite significant demand from buyers, so we could see this shortfall continue until June.”

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