The Land Registry report shows the number of sales in England & Wales has reduced by 15% while house prices have continued to increase.
Over the year UK house prices are higher by 4.6% and in the last month by 1.7% with the average price of a home increasing to £183,861. In the East of England prices are up even higher at 8.9% ahead of London with 8.3% rise.
Higher prices may be due to property sales volumes that have remained low in 2015 with figures for May at 65,619 compared to 77,488 this time last year.
The combination of lower supply of homes and rising prices places extra strain on first time buyers to afford the deposit and mortgage to get on the property ladder.
Higher purchasing activity from buy-to-let investors has resulted in more competition for home movers as they struggle to find suitable properties to buy.
Rising prices spreading out of London
The Land Registry data also shows house prices are rising faster outside of London in the commuter towns and outer boroughs.
In total 15 outer London boroughs experienced price rises of 10% or more over the last year with the largest rise of 14.6% for Hillingdon.
The commuter towns also saw house price rise of 10% or more. Reading experienced an increase of 13.6% followed by Slough with 11.6%, Thurrock rising by 11.4% and Luton higher by 11.0%.
Higher property values for older homeowners allows the equity release mortgage buyer to access wealth to repay an interest only mortgage, pay for care at home, or gift to a family member or friend.
The leading area for improving house prices is the East followed by London and the South East. The remaining parts of the UK had growth of 5.1% or less with the Land Registry figures as follows:
| Area | Value | Change |
|---|---|---|
| East | £209,989 | 8.9% |
| London | £488,782 | 8.3% |
| South East | £252,528 | 8.2% |
| East Midlands | £136,600 | 5.1% |
| England & Wales | £183,861 | 4.6% |
| South West | £190,996 | 4.2% |
| West Midlands | £139,525 | 3.2% |
| Yorks and Humber | £123,663 | 3.1% |
| Wales | £120,091 | 1.5% |
| North West | £114,064 | 1.4% |
| North East | £100,670 | 0.4% |
Data from the Land Registry includes property purchased with cash as well as a mortgage and the most expensive property sale in July was for £12.9 million in Westminster, London.
An advantage of rising house prices for homeowners is remortgage buyers are in a better position to release capital from their property, such as for making home improvements.
Central London struggles with growth
The strong rise in prices is in contrast to luxury central London properties where prices have been subdued following the changes in stamp duty.
About 2% of purchasers paid on average £28,000 more stamp duty and two thirds live in central London.
For home movers wanting to trade up when prices are rising, they may find their next property is more expensive with higher stamp duty tax which means they need a larger deposit.
Sales of properties worth over £1 million reduced by 21% or 878 in the year to May 2015 compared to the previous year with 1,113 sold and in London there was a 26% decrease.
Properties in other parts of the country decreased such as Darlington in North East where house price fell 5.4% and Pembrokeshire with a 5.4% fall in July.
Even so, the number of repossessions in England and Wales decreased from 937 last year to 496 for the year to May 2014, a fall of 47%. The greatest fall in repossessions has been in the South East.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth for home or garden improvements and holidays.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, property value tracker chart and mortgage monthly cost calculator.
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