House prices: growing house price divide

London, the South East and East Anglia continue to set new house price highs

Alex Johnson@shedworking
Monday 15 September 2014 15:19

The average house price across England and Wales has jumped to a new record of £274,302, according to the latest report from LSL Property.

However, excluding London and the South East from the figures, this average drops by £89,000 to £185,496 which marks the biggest price disparity since 1995.

London's annual house price rise is now running at 20.6 per cent, while growth is slowing outside the capital and the South East, dropping to 4.3 per cent in July.

"A game of two halves is being played out in the UK property market," said David Newnes, director of Reeds Rains and Your Move estate agents. "In terms of average house price growth, a gap has developed between the South East corner and the rest of the country. If we exclude the key players of London and the South East from the game, a whole different playing field is revealed.

"It is critical that support mechanisms like Help to Buy aren’t dismantled. In July, house price growth slowed across all regions except for London, the South East and East Anglia. While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth."

Other house price indices show much lower averages based on different estimating techniques. Earlier this week, Halifax's figures indicated that prices in August rose 0.1 per cent compared to July to an average of £186,270.

According to e.surv's latest mortgage analysis, house purchase approvals fell five per cent in August, the second consecutive month in which monthly approvals have fallen.

There were 63,485 house purchase approvals in August, compared to 66,569 in July.

"The summer holiday season temporarily slowed the mortgage market, as home-movers hung up their property search in exchange for buckets and spades," said Richard Sexton, director of e.surv chartered surveyors. "But this is a seasonal stagnation rather than a sign of a more permanent decline.

"As the seasons change and we move into autumn, we are already anticipating that mortgage approvals will bounce back upwards. There is still a whole host of buyers desperate to get onto the housing ladder, particularly at the bottom of the market."

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