House prices: Rate of growth slowing

Average rents grow at the fastest rate for a year

Click to follow
The Independent Online

Average house prices are up by the highest annual increase in four years - 9.6 per cent or £23,443 - but the rate of growth is slowing on a monthly basis, according to the latest figures.

LSL Property Service's report shows that the rise is just over five per cent excluding London and South East, while the growth in June was 0.7 per cent or 0.1 per cent without London and South East.

Although price indices vary considerably because of different ways of assessing them, LSL puts the average house price now at £268,637.

"Twelve months of solid house price increases have driven up average property values to a new record high," said David Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL. "But if you exclude London and the South East from the picture, average house prices across England and Wales have risen a far more sustainable 5.2 per cent.

"There are also new signs that growth is beginning to slow as we move into summer, and following the changes brought about by the Mortgage Market Review implemented at the end of April."

He added that while London's annual growth has reached 15.6 per cent, prices have begun to fall at the upper end of the market. The City of Westminster and the City of London have seen house prices drop in the last yearm, while in four of the top five most expensive London boroughs, average house prices have dipped below their respective peak levels."

Meanwhile figures from Countrywide indicate that average rents have grown at the fastest rate for a year.

Its report out today shows that average UK monthly rents increased 4.6 per cent year-on-year and prospects for future growth in rents look strong.

Although rents grew most quickly across parts of Northern England, the fastest growth areas were Outer London and the East of England 

Nick Dunning, Group Commercial Director, Countrywide said: "The recovery in mortgage availability, Government Help to Buy scheme and improving sentiment in the housing market has seen a wave of tenants move into home ownership.

"Over the medium to longer term a lack of supply will increasingly put landlords in a stronger position to ask for, and achieve, higher rents. Significant upward pressure on rents will come from a lack of house building, particularly in London, the South East and other major conurbations with sound fundamentals experiencing population growth. The single best way to alleviate upward pressure on rents is to build more affordable new homes, both for rental and for sale."