The Land Registry issued its House Price Index during the course of last week. The headline figures reported that the annual fall of 2.6% of house prices year on year with this rate of decline being at a similar level for the last five months. The average price of a house in September 2011 being £162,109 compared with £166,364 September 2010.
More crucially for conveyancers the number of conveyancing transactions has declined over the last year. Figures are at present only available up to the end of July 2011 which showed an 11% decline in sale numbers compared with July 2010. In the period April to July 2010, an average of 58,672 conveyancing sales occurred per month whilst the same period in 2011 the figure was 53,752.
The graph below shows the trend of transaction volumes over time.
The bar chart below shows the spread of transactions over a range of house prices.
The figures above are taken from Land Registry HPI.
Peter Rollings, CEO of estate agent Marsh & Parsons comments on today’s Land Registry figures: “While the national housing market looks far from healthy, it is a long way from being in freefall. In fact, house prices actually showed signs of growth in many regions last month. Nevertheless, in many areas, sales activity has been more subdued than last year as a result of buyers’ concerns over the future direction of house prices and the wider economy. But the main and ongoing issue is that for those actively looking to buy, securing a mortgage is like trying to get blood from a stone. In the past, lenders were undeniably lax with criteria — but now the complete opposite is true. There might be several excellent deals on offer, but not all buyers qualify and the time it is taking to secure these deals means that both buyer and seller can lose patience, which causes transactions to fall apart – leading in many cases to a domino effect on other properties in the selling chain.
“London’s market must be seen in a different light altogether. While the fears of the ongoing Eurozone crisis may impact on lenders’ desires to further increase their activity, it hasn’t yet dampened buyer demand from European investors. If anything, the overseas turmoil has driven up demand for London’s property, and there is no shortage in both UK and international investors observing the strong long-term investment potential of property in central London. A shortage in the supply of quality homes, combined with this demand has continued to lift prices in the capital.