House prices in the capital have reached a new high in September and is likely to exceed half a million next month according to the Land Registry.
The Land Registry market data shows London average property price is £499,997 after rising 1.8% for a month to September.
Over a year the capital has seen average house prices rise 9.6% helping prices in England and Wales to a six month high with the South East second up 8.5%.
Average house prices in England and Wales are at up 5.3% at £186,553 even though the number of completed house sales decreased by 4% to 81,696 in July 2015 compared with 84,691 a year earlier.
The continued rise in house prices in most regions means first time buyers would require a larger deposit or higher earnings to purchase their first home.
London prices rising fastest
Prices in London are rising faster than any other region with a 1.8% increase month on month and over a year a 9.6% annual change. This is now higher than the figures last month with an increase of 6.6% over the year to August.
For buy-to-let landlords with existing properties in London, the rise in house prices creates more equity which they can benefit from if they sell in the future.
For the East of England prices are rising at a consistent rate currently up 8.3% over the year. The latest figures from the Land Registry are as follows:
| Area | Change | Value |
|---|---|---|
| London | 9.6% | £499,997 |
| South East | 8.5% | £256,737 |
| East | 8.3% | £211,161 |
| South West | 4.4% | £193,538 |
| England and Wales | 5.3% | £186,553 |
| West Midlands | 4.8% | £141,470 |
| East Midlands | 3.8% | £136,643 |
| Yorks and the Humber | 3.7% | £124,473 |
| North West | 2.5% | £115,594 |
| Wales | 0.7% | £119,916 |
| North East | -0.3% | £99,559 |
The Land Registry house price index is based on completed house transactions including properties sold with a mortgage and for cash.
House prices in London are about to break the £500,000 level for the first time. For home movers there is widening gap between the price of their existing home and the next that increases and they need a larger mortgage to buy a new larger home.
Although house prices are rising, for properties valued over £1 million the numbers of sales have decreased by 9% from 1,555 last year to 1,413. This could be due to the recent changes in Stamp Duty increasing the cost of selling these homes.
The rise in house prices allows theolder equity release mortgage buyer to access the wealth in their property to pay for care at home or help children start or expand a business.
Less home repossessions
The number of home repossessions have decreased significantly by 50% over the year from 943 in July 2014 to only 471 today.
London has seen the biggest percentage fall of 69% reducing from 115 a year ago to 36 now with the North West the largest by numbers reducing from 234 last year to 133 by July 2015.
The decrease could be due to the very low mortgage interest rates that have been reducing with greater competition and choice from lenders as well as improved earnings and employment growth.
For remortgage buyers at the end of your mortgage deal, you should avoid the lenders expensive variable rate and switch to a preferential rate with low interest reducing your monthly repayment costs.
For an average detached house the price has increased from £258,274 in July 2013 to £291,836 in July 2015 or higher by £33,562 which could be released to improving the home.
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 cost calculator.
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