14th April 2016
Property sales in England and Wales have seen the strongest March for nine years with transactions up 30%, partly due to the rush to beat the Stamp Duty deadline at the beginning of April.
House price growth also accelerated, up 6.9% year on year and 0.6% month on month, taking the average price to £291,650, the figures from the Your Move house price index also shows. It means that a typical home is now worth £18,745 more than a year ago. When London and the South East are left out of the calculation prices were up 5.1%, suggesting that the market is still strong outside these two growth areas.
Indeed, the London market saw the fastest growth of any region as house prices rose 8.2% or £44,548 year on year. Bath and North East Somerset saw the largest March pick-up in property prices, climbing 5.3% or £18,603 month on month
According to Adrian Gill, director of Reeds Rains and Your Move estate agents, the impending stamp duty rise for additional properties that was introduced at the start of April helped March record the strongest homes sales for the month since 2007.
‘The surge was widespread across England and Wales. This goes beyond any normal seasonality, with second home and buy to let investors rushing to beat a bigger tax bill,’ he explained. Overall some 73% of local authorities in England and Wales experienced a monthly upswing in home values, the highest proportion of areas seeing positive property price rises since July 2014.
‘This will be welcome news for homeowners, who now have a fantastic opportunity in the current sellers’ market. The pervasive shortage of homes on the market is still driving up values, as buyers have to compete for each available property. If they are going to make it easier to get a foot on the property ladder, the Government will have to double down on its help to first time buyers, or let up on landlords,’ said Gill.
He also pointed out that after a bit of a downturn over the winter months, the London property market is growing again with prices up 8.2% higher than a year ago. ‘The lift in London’s house prices seems steep. But we’re actually in a much calmer position than previous years, with the current rise still well below London’s record 20.6% year on year growth, established in July 2014,’ Gill said.
He also pointed out that the growth in London property values means it is once again pulling away from the rest of the country, with London and the South East now dragging up national house price growth by 1.8%, double the rate seen at the end of 2015.
‘As a result, we’ve returned to a two speed housing market, as growth in the rest of the country is easily outpaced by London and the South East. But it’s not all about London, as house prices are still advancing in the Northern cities, with the average property price in Manchester hitting a record high of £174,448, up 3.5% annually,’ Gill explained.
The data shows that within London the gap in home prices has moderated. The cost of a typical home in London’s most expensive borough Kensington and Chelsea at £1.9 million remains 6.8 times higher than its cheapest, Barking and Dagenham at £274,000.
‘However, this situation may now be improving, with house prices in Kensington & Chelsea only up 5.1% year on year. On the other hand, home owners in Barking and Dagenham have enjoyed an 18.4% rise in property values over the year,’ Gill said.