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House price increase reaches four-year high

Words: Roger Milne
House sales

Average house prices in England and Wales rose by 6.7 per cent in the year to the end of March, according to the Land Registry’s April 2014 Market Trend report.

But the average price of a house – at £172,069 – remains short of the November 2007 peak of £181,572.

The averaged out figures also mask enormous regional discrepancies in house prices and price growth. The 17 per cent price rise in London over the year was more than double that of the next fastest-growing region, East England, at 7.8 per cent.

And the average value of a home in London at £435,034 was almost double that of the next nearest region, the South East, at £225,650. House prices in Wales increased by just 3 per cent to an average of £117,581.

Across the two nations the most sluggish region was the North East, where the price rise was just 2.9 per cent over the year and a house costs on average £99,001 – less than a quarter of the average house price in the capital. House prices in the North East in fact fell in March, according to the report.

Land Registry figures are considered to be among the most reliable available because they are based on actual sales data and compare the price at which a property previously sold for.

The figures seem to give weight to fears that the UK property market – particularly in London – is overheating. But some commentators have suggested that a cooling down is already taking place. The Nationwide Building Society has warned of a “natural correction” as house prices hit the upper limit that people are prepared to pay.

Meanwhile, Peter Rollings of estate agent Marsh and Parsons told the BBC that he believed there was a “new calm and steadiness” in the market and “proper prices have plateaued as more property has come onto the market”.

Land Registry figures show that the volume of property sales was 20 per cent higher through 2013 than the previous year. The first two months of 2014 revealed sales volumes 43 per cent higher than in the same period in 2013. However, the number of sales appeared to peak in January and was beginning to fall again.

Housebuilding figures for England published by the Department for Communities and Local Government (DCLG) show that the number of new starts was estimated at 36,450 in the March quarter 2014, 11 per cent higher than the previous quarter and 31 per cent higher than the same quarter in 2013.

Annual housing starts totalled 133,650 in the year to March 2014, up 31 per cent on the previous year. Completions, however, were just 4 per cent up, at 112,630, and remain some 43 per cent below their 2007 March quarter peak.

The Land Registry report notes that he most expensive sale in April 2014 was for a property in the London borough of Kensington and Chelsea, which sold for £24m. The cheapest sale in April 2014 was Co Durham and sold for £12,000.

Read the Land Registry's Market Trend report for April.