London house prices driving people to move away – but only 26 miles

Rising house prices have sparked a jump in the number of people looking to leave London but on average they only move 26 miles away, according to research published on Monday.

  Estate agent Hamptons International also found that throughout England and Wales people were generally reluctant to move far, with the average distance just 2.5 miles. 

  Its analysis of who is moving where found that 32 is the average age that Londoners move away, often because they have young families and want to settle somewhere outside the capital before their children start school. It forecasts central London prices will rise by 32% over five years and said that was a key driver in families moving out while staying close enough to commute back. 

  "In the last three months the number of London buyers registering with our country offices has increased by 12%. As house prices increase at a faster rate in London than anywhere else, Londoners are increasingly waking up to the idea that they can get more value for money outside the capital," said the group's head of sales, Marc Goldberg. 

  The south-east and west are the biggest draws, taking half the 250,000 Londoners who left the capital in 2012, the agent said.

  People aged between 19 and 25 are most likely of all age groups to move to the capital, largely reflecting students moving there and young graduates taking jobs in London. It also found that people moving into London move furthest – on average 34 miles. 

  While the average distance home buyers in England and Wales move was just 2.5 miles, that masked a wide range: two thirds moved within five miles but 14% moved more than 50 miles. People moving within London went an average of 1.3 miles.

South West London house prices surge

Prime central London house prices continue to show steady year on year growth, while the predominantly domestic markets of southwest London have recorded double digit rises as a wave of equity pushes out from the core central zone, says international real estate adviser, Savills.
 
Values in prime central London rose by 1.9 per cent in the three months to the end of September, according to the Savills prime central London index.  This takes annual growth to a relatively modest  5.6 per cent, but continues a record-breaking period of steady, single digit annual price growth.   
 
There are now clear signs of outer prime London playing catch-up, with average prices across the wider markets of prime London rising 3.3 per cent in the quarter and 9.2 per cent year on year.
 
The standout performer is prime southwest London – a largely domestic market that stretches from Fulham to Wimbledon – where prices rose 4.0 per cent in the last quarter and 11.8 per cent year on year.    These markets are now on average 28.1 per cent above their 2007 peak, just behind prime central London at 30.1 per cent. 
 
Less accentuated but nonetheless robust price growth  has also been seen in other locations that have historically lagged central London, such as Islington and Wapping.
 
Properties valued up to £1million have performed particularly strongly, while year on year growth in the £10million+ central London sub-market is just 1.8 per cent as prices appearing to have broadly plateaued at 38 per cent above their 2007 levels.

First-time buyer lending in London at highest level since 2007

First-time buyers accounted for 11,200 loans for house purchase in London in the second quarter of 2013, the largest quarterly number since the end of 2007, according to new data from the CML released today.

Figures from the second quarter show that first-time buyers in London make up a larger proportion of house purchase loans compared to the UK overall. In the second quarter, 56% of house purchase loans were to first-time buyers in London compared to 46% in the UK overall.

First time buyers

In the second quarter of 2013, the 11,200 loans advanced to first-time buyers in London marked an increase of 19% on the previous quarter and a rise of 38% compared to the second quarter of 2012.

Typical loan amounts have also increased, a knock-on effect of strong house price growth in the capital, up 6.9% in the second quarter compared to 2.9% for the UK overall. This results in a larger growth in the value of lending to first-time buyers. £2,490m was advanced to these borrowers in the second quarter, a 33% increase on the first quarter of 2013 and up 47% compared to the second quarter last year.

Whilst first-time buyers took out larger loans (on average £192,600 compared to £183,900 in the second quarter last year) the affordability was almost unchanged thanks to higher incomes and falling interest rates. This meant on average first-time buyers spent 20.8% of their income on mortgage payments almost unchanged from 21% in the first quarter of 2013.

Affordability in London does however remain tighter than in the UK overall with first-time buyers borrowing an average of 3.67 times their income compared to 3.30 for the UK overall in the second quarter. This may be why first-time buyers in London are generally putting down larger deposits than in the rest of the UK. The average loan to value remains at 75% in London compared to 80% for the rest of the UK. In addition, incomes of first-time buyers in London are higher than in the rest of the UK- on average £52,100 per annum compared to £35,400 in the UK overall.

Lending for house purchase

Total house purchase lending in London was boosted by the increase in lending to first-time buyers and showed an increase of 16% compared to the first quarter and 18% compared to the second quarter of 2012.

There were 20,100 house purchase loans advanced in London worth £5.1bn in total, a 23% rise in value compared to the first quarter of 2013 and up by 20% compared to the second quarter last year.

London's million pound boroughs see £90K price drop

The average asking price of property coming to market in London fell by 2.8% (-£14,312) this month. The peak holiday month of August is traditionally volatile, with price falls recorded every year since Rightmove first published its index in 2002.

 Fewer sellers have come to market, down 9% on July, with discretionary sellers more focused on holidays and content to wait for the busier autumn selling season.

Miles Shipside, Rightmove director and housing market analyst comments:
“A holiday season price dip is the norm in August, though sellers who do come to market during August tend to have a more pressing reason to sell and consequently price more aggressively. Even with this month’s 2.8% fall, the asking prices of property coming to market are still up by an average of £36,000 so far in 2013”.

During the holiday season lull, the top-priced boroughs tend to record the largest falls, as higher-priced property owners show a greater propensity to hold off placing their property on the market.

This is evidenced by new sellers in the ‘million-pound-plus club’ boroughs of Kensington and Chelsea, Westminster and Camden dropping their asking prices by an average of 5.6% compared to July.

Shipside observes:
“The average price drop of nearly £90,000 in the million-pound-plus boroughs is a sign of down-time rather than a downturn. The top-end market remains buoyant, but they’re currently busy bobbing about on their yachts”.

The more affordable boroughs of Tower Hamlets (+2.9%), Ealing(+2%), Waltham Forest (+1.4%), Harrow (+0.9%) and Sutton (+0.4%), priced at an average of half a million and below, maintain their momentum and are the top London performers this month.

Shipside adds:
“While London’s best performers this month recorded comparatively modest increases compared to the heady ones seen earlier in the year, they still bucked the trend of holiday season price falls. It shows that while there is a lot of chatter about international buyers in central London, the bulk of the London market is driven by ordinary boroughs and the housing needs of ordinary people”.

Greater London house price growth of 6.9% predicted in 2013

Key Points:

·      Prices to rise in PCL by 8.4% this year up from previous forecast of 5%

·      Return of bidding wars in some areas of London

·      Rental growth static at 3% in 2013

·      Prospect of rising base rates a concern

Greater London house prices are set to grow by 6.9% this year, annualised at a rate of 3.2% over the next five years as the Government’s Help-to-Buy scheme is extended to all homebuyers from next year bringing more financed buyers to the market without an equivalent increase stock, reports Cluttons in its Residential Property Forecasts – Q3 2013.

The consequence of this pace of uplift in house prices will push ownership in and around London out of reach of yet more households. Even in London where earnings tend to grow slightly ahead of the national average, it is unlikely that average earnings will keep pace with this rate of house price growth over the next two years as the economy struggles back to strength.

The position is more acute in prime Central London where Cluttons has revised its forecast of 5% house price growth to 8.4% this year with an annualised average of around 4% to the end of 2018. Credit ratings agency Fitch has also warned that Help to Buy could artificially push up house prices without increasing the number of homes built, which corroborates Cluttons' expectations of affordability re-emerging as the central issue for buyers given that mortgage lending has improved.

The upturn in prices has caused a return of bidding wars in the capital which has tempered the capacity of first time buyers to enter the market. Greater acceptance of buy to let mortgages for those wishing to rent and buy or rent further from London has further reduced the availability of stock traditionally available to first time buyers.

Sue Foxley, head of research at Cluttons said: “Improved consumer confidence, an easing in mortgage credit and the raft of government policy intervention measures to bolster new buyer demand will drive further capital growth and this has led us to revise our forecast to 8.4% price growth this year.

“The prospect of rising base rates over the medium term proffers a further concern with the ratio of residential values to gross earnings already over seven in London. With few signs of a dramatic increase in supply that would have the potential to change the balance of this equation, the rental market will inevitably move up the agenda for London’s households and policy makers.”

Cluttons also reports that rental demand in Central London remains strong but individual and corporate rental budgets are subdued which is translating into RPI, nil or slightly negative rental growth. Cluttons forecasts London rents to grow by 3% this year, with an annualised average of 4% per annum to the end of 2018 which is in line with long term average earnings growth for London.

Renting a property near to London’s best primary schools will see parents pay 18% more

Renting a property near to London’s best primary schools will see parents pay 18% more for their homes, says a report by Select Property.

Summary:

• It is 18% more expensive to rent a property in areas in London with top performing primary schools
• Kensington is the best location in London for primary schools
• Rents in Kensington can reach £658 per week

The cost of renting close to London’s best primary schools is 18% higher than the capital’s least performing schools.

According to Rentonomy, Kensington is the best area in the city for non-religious state primary schools, followed by Sheen, Richmond, West Norwood and Teddington.

The average score for schools in Kensington is 32.7 – 16% higher than the average level in London, based partially on Key Stage 2 2012 performance tables.

Kensington is also home to the most expensive primary school to rent a property near. Residents residing close to Fox Primary School in the W8 area can expect to pay £658 per week in rent, with the school achieving a rating of 32.7, indicating that price increases may be related to the quality of the education establishment.

The second most expensive school to rent close to is Thomas Jones (31.6) in Notting Hill with properties averaging £497 per week in this area.

However, Londoners do not need to break the bank to send their children to good-quality schools as the two top performing primary schools are in areas with rental charges of £191 per week and £258 per week (Newton Farm in Rayners Lane and Grinling Gibbons in Deptford respectively).

Parents might be tempted to look for a property to rent close to these two less expensive areas after LSL Property Services recently revealed the steep costs of renting in the UK. Last month, it reported that average rents in England and Wales were £737 per month in June, with this figure increasing for properties in the capital.

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Prime London house prices tipped to rise 26%

Property prices in the capital's most prestigious postcodes are continuing their stratospheric rise.

Knight Frank, the upmarket agency, began this year by saying prices in London's smartest districts would not rise during 2013, largely because stamp duty on the purchase of homes over £2m was increased from 5% to 7%.

But the firm has just revised its forecast from zero to 6%, saying "in spite of record prices viewings are up 15% compared to 2012". Applicants and sales volumes are also up, Knight Frank says, confounding the idea that more stamp duty would deter buyers.

Continued price growth follows already massive gains for this top slice of the market, generally referred to as "Prime Central London" (PCL) and comprising the fashionable areas of Kensington, Knightsbridge, Belgravia, Regents Park and Chelsea. Prices here are 60% higher than in March 2009 when the global financial crisis was at its peak.

Now prices are tipped to rise even further fuelled by foreign buyers.

"PCL prices are expected to increase by a further 26% in sterling terms between 2013 and 2018 but at a much slower rate for international buyers," according to Knight Frank researcher Liam Bailey. He reckons for US dollar-denominated buyers, prices will rise a smaller 15% over the same period as the dollar strengthens against the pound. Since Asian buyers use US dollars for these types of transaction, they would experience a similar benefit.

UK house prices grew 0.3% in July

Hometrack house market report

Key Points:

• While overall housing market conditions continue to improve the rate of house price growth slowed in July on softening demand.
• A scarcity of housing for sale has been a key feature of the market in recent months. While supply has been growing it has failed to keep pace with demand. This trend reversed in July with a 2.4% increase in supply on the back of improving market sentiment.  
• House prices grew 0.3% in July, down on the 0.4% growth in each of the previous two months.
• New buyer registrations are slowing as seasonal factors kick in – demand for housing grew 1% in July, down from 1.6% in June and 2.5% in May.
• The coverage of price rises fell marginally over July with 29% of markets registering price increases – down from 31% in June.
• Other market indicators are still improving on the back of continued price rises and rising sales volumes. 
• The average time on the market has fallen to 8.2 weeks - the lowest for 6 years as a result of rapidly shortening sales periods in London (3.8 weeks) and the South East (6.4 weeks). 
• Vendors across the country are benefiting from a lower discount on asking price which currently averages 5.6% - another measure that is back to 2007 levels. Firmer pricing is drawing vendors into the market. 
• Looking ahead we expect demand to continue to slow over the rest of the summer as seasonal factors play their part.  The supply of homes for sale is likely to expand further as vendors look to benefit from improving market conditions and expectations of a renewed pick-up in demand in the autumn. 
• Whether 2013 turns out to be the year with the highest increase in house prices since the start of the downturn will depend on the level to which new buyers enter the market in the autumn. 

Richard Donnell Director of Research at Hometrack - the residential property analysts - said:

“The latest survey shows overall housing market conditions continuing to improve with shortening sales periods and vendors achieving lower discounts on asking price. However, the rate of house price growth slowed slightly in July as a result of weakening demand as we enter the holiday season.

"The momentum generated over the last six months looks set to moderate in the short term with less upward pressure on prices. The year has got off to a strong start. The level to which new buyers enter the market in the autumn will dictate whether 2013 turns out to be the year with the highest increase in house prices since the start of the downturn.

House prices grew by 0.3% in July, down on the 0.4% growth recorded in each of the previous two months. 

"A continued slowdown in the rate at which new buyers are entering the market (up 1% in July) is starting to reduce the upward pressure on house prices. The geographic coverage of price rises also slowed in July with 29% of the country registering price rises and just 1.8% recording price falls.

"London continues to be the engine for overall house price growth with prices in the capital up 0.7% in July, down from a 0.9% increase in June. Across the rest of the country, three regions saw prices remain unchanged in July (East Midlands, Yorkshire & Humberside, North East) while the remainder all registered price increases of up to 0.4% in the South East.

"Despite the modest slowdown in prices in July all the key market indicators continue to improve. The average time on the market has fallen to 8.2 weeks which is the lowest for 6 years thanks to rapidly shortening sales periods in London and the South East. Vendors across the country are benefiting from a lower discount on asking price which currently averages just 5.6% - another measure that is back to 2007 levels."

Further growth forecast for Prime Central London property in 2013

Property prices in prime central London continued to rise in July and now stand almost 60% above their financial crisis low in March 2009, say Knight Frank.

This nn ow points to total growth in 2013 of 6%.  

Key points:

#  Prime central London residential prices increased by 0.5% in June and by 4.2% so far in 2013

#  Over the past 12 months, price growth in prime central London has totalled 7%

# The strongest price growth has been seen in the sub-£1m price bracket

#  The biggest price rises during June were seen in Islington (1.1%), Marylebone (1.1%) and the South Bank (1.5%)

# Prices are expected to increase further as viewings are up 15%

Christian Lock-Necrews, the Head of Knight Frank’s Marylebone office: “For a central location in the greatest city in the world, Marylebone still offers good value in the £1m+ category to British buyers and those from abroad.  

"An eclectic community with a hugely popular destination high street and a recent offering of the highest quality product at 25% less than other PCL boroughs has altered the buyer perception of Marylebone and Fitzrovia. 

"They are attracted to an area that retains its community feel but has world class shopping, access to London’s great parks and is in the heart of the West End.”

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UK House prices increase to an average of £162,621

The June data from Land Registry's House Price Index shows an annual price increase of 0.8 per cent which takes the average property value in England and Wales to £162,621.
 The monthly change from May to June shows an increase of 0.6 per cent. Repossession volumes decreased by 26 per cent in April 2013 to 1,185 compared with 1,599 in April 2012. 
• The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 6.9 per cent. 
• London also experienced the greatest monthly rise with a movement of 3.1 per cent. 
• The region with the greatest annual price fall is the North East with a decrease of 3.8 per cent.
• The North East also saw the most significant monthly price fall with a decrease of 2.2 per cent.
• The most up-to-date figures available show that during April 2013, the number of completed house sales in England and Wales increased by 12 per cent to 48,367 compared with 43,252 in April 2012. 
• The number of properties sold in England and Wales for over £1 million in April 2013 increased by 45 per cent to 703 from 484 in April 2012. 
• The West Midlands was the only region to see an increase (8 per cent) in repossession sales between April 2012 and April 2013. The region with the greatest fall in the number of repossession sales was London where repossessions dropped by 37 per cent (April 2013 compared with April 2012).
The most expensive sale in June 2013 was of a property located in central London which sold for £12,250,000. The cheapest sale in June 2013 is located in Accrington, Lancashire and sold for £13,000. 

David Newnes, Director of LSL Property Services and Owners of Your Move and Reeds Rains said: “Momentum is growing in the housing market. The first time buyer market is showing it is ready to bounce back after a tough past couple of years, and the market is no longer dominated by equity rich buyers. Improved confidence – both among lenders and buyers – and a limited supply of properties is driving up values, plus the new government schemes have given the whole market a boost. The availability of cheaper mortgages has improved significantly in the last few months allowing banks to access cheaper credit and enabling them to loosen the purse strings on higher LTV mortgages. Even though first time buyer activity is lagging far behind its pre-2008 levels, there are good signs that progress is being made. The first-time buyer market is thawing, and that will energise the whole property chain, which will keep house prices moving steadily up as long as house building remains low.  We expect more lower income buyers to flock to the market and this will help stimulate growth across the board.”

Prime central London property bubble ‘bigger and still vulnerable’

As London’s prime residential property prices rise even further relative to the rest of the UK, a new report commissioned by Development Securities PLC and carried out by Fathom Consulting, today concludes that while economic drivers can partially explain this growing premium, a proportion remains difficult to explain – the core characteristics of an asset price ‘bubble’.

The report, Prime Central London: One year on, and even higher, uses a unique statistical model to identify the key economic drivers behind Prime Central London’s (PCL) price movements. These are materially different from those affecting house prices in the rest of the UK, and include: global equity prices; the relative value of sterling; and safe-haven flows. Over long periods of time, the model has accounted for 85% of the movement in PCL prices. The report finds that the price of a typical property in PCL is now more than 6.5 times the national average, and has risen by almost 20% since the time of our first report published last year. Moreover, PCL prices are more than 10% higher than Fathom’s economic model suggests they ought to be. PCL valuations now seem less sustainable and more vulnerable to correction.

The report identifies that the biggest threat to PCL property prices would be the failure of the US Federal Reserve to engineer a smooth exit from its Quantitative Easing programme. By tapering too soon and implementing a simultaneous tightening of both fiscal and monetary policy, the report identifies a risk that the US Federal Reserve sparks a fall in the price of assets, including PCL property. The report warns that a disorderly unwinding of the US QE programme could knock around 40% off global equity prices and about half of this amount off PCL property prices.

This is the second report in a series on Prime Central London property. The previous report, Prime Central London: In a Class of its own? was published in May 2012 and showed that global investors seeking a safe-haven, immune from the threat of the euro demise, had significantly boosted PCL prices. 

Michael Marx, Chief Executive of Development Securities PLC, said: "We remain convinced of the underlying attraction of Prime Central London property. As a place in which to live, Prime Central London is unique. But of course that does not make it immune from the laws of supply and demand. With the average Prime Central London property now a little under £1.5 million, valuations have never been more stretched. We are less confident now than we were back in May 2012 that Prime Central London prices are sustainable.”

Danny Gabay, Director of Fathom Consulting, said: “With the prospect of a euro break-up moved to the back burner, ‘tapering’ by the US Federal Reserve has come to the fore as the biggest threat to PCL prices. The gradual withdrawal of monetary stimulus by the world’s largest central banks risks removing one of the key supports to global asset prices, including PCL. In the event that tapering triggers a sharp fall in asset prices, the response of sterling will be key. If Bank of England Governor Carney can convince markets that a policy tightening in the UK remains a very distant prospect, sterling may fall against the US dollar, and against other currencies more generally. This would mitigate some of the downward pressure on PCL values.”

UK house prices heating up, rising 2.1% faster than inflation

KEY POINTS:
* The average UK house price rises to £199,534, up 2% on month and 5.4% annually, more than 2.1% faster than inflation, which stands at 3.3% (RPI) 
* House prices in London grow by over £10,000 in June to £386,139, up 3% on month and 2% annually 
* UK transactions rise annually by 19% and 22% in London, as buyers continue to take advantage of attractive mortgage deals 
* The number of UK mortgage applications is up 33% annually and first time buyer applications soar by 37% compared to June last year 

The UK’s average house price has risen by 2% on month and 5.4% annually, to £199,534 according to the Sequence group. 
This is the highest price point for over two years and the growth is 2.1% higher than inflation. 
London has also seen strong price rises, with the average property price standing at £386,139, which is 3% higher than May (up £10,157) and 2% higher than last June. Graph 1 shows the growth over two years with a steep rise since April, averaging at a 3% rise per month over the last quarter. 
Property transactions across the UK are at a two year high, rising by 2% in June and 19% annually, showing that buyers are undeterred by the increasing prices.(Graph 2*) Transactions in London are mirroring the national picture, rising by 22% annually, and an average of 8% per month since the start of the year. 
These high levels of transactions and increasing property prices are attributed to improving access to mortgage finance, through initiatives, such as the Funding for Lending scheme, and some relaxation in lending criteria.  
 David Plumtree, Chief Executive at Barnard Marcus, part of the 300 branch Sequence group, including William H Brown and Fox & Sons, comments: "Like the current temperatures, house prices just keep on rising with unprecedented gains in June. This is excellent news for home owners and those looking to sell over the summer. 
"It’s also extremely encouraging to see applications for mortgages from first time buyers increasing by over a third annually (37%). Instead of being deterred from entering a market which is seeing increasing house prices, first time buyers are using this period of improved financial access to step onto the ladder, and they are certainly contributing to the healthy buyer registration figures we’re seeing, up 16% annually. 
"The London market remains strong, with prices growing by over £10,000 in June alone. Increasing demand is still not being met, with new buyer registrations in London growing 47% annually but the supply of properties coming onto the market rising by just 22%. With finance readily available, people will continue to enter the market and prices will keep on rising." 

Key figures figures from the region's:

Wales: Average House Price £170,179 % Change Monthly 1.18%% Change Annually 8.18%
South West: Average House Price £180,240 % Change Monthly 2.14% Change Annually 7.37%
North West: Average House Price £145,343 % Change Monthly 0.62% Change Annually -0.79%
South East: Average House Price £242,902 % Change Monthly 1.69% Change Annually 0.95%
London: Average House Price £386,139 % Change Monthly 2.70% Change Annually 1.78%
East Anglia: Average House Price £162,663 % Change Monthly 1.64% Change Annually -0.05%
Midlands: Average House Price £132,528 % Change Monthly-0.87%  Change Annually 3.44%
North East: Average House Price £125,293 % Change Monthly 2.44% Change Annually 3.90%
Scotland: Average House Price £117,332% Change Monthly -0.01% Change Annually 3.54%

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Region by region breakdown of change in UK asking prices

Rightmove said: "New sellers are now asking 4.8% (+£11,561) more than a year ago, a big jump from the 2.7% annual rate recorded in June. With all regions showing a year-on-year increase for the first time since September 2010, several factors suggest this is a broader-based recovery, fuelled by the ‘aggregation of marginal gains’."
Miles Shipside, Rightmove director and housing market analyst comments: 
“The market is currently benefitting from the ‘aggregation of marginal gains’ where incremental improvements across a range of key market drivers help to slowly but surely build momentum. Rightmove’s lead indicators show increasing enquiries to agents and developers, new sellers and marketing prices. An important signal for a broader-based and sustainable recovery is that all regions of the country now have higher prices than a year ago firmly on the record”.

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London house prices up by 5% over 12 months

• May house prices up 0.1 per cent since April: average house price in England and Wales now £161,969
• 1,448 repossessions in England and Wales during March 2013
• South East tops the table of regional applications with 278,186 in May
• Over 56,800 residential properties in England and Wales lodged for registration in May ranging from £10,000 to £27 million

The May data from Land Registry's House Price Index shows an annual price increase of 0.5 per cent which takes the average property value in England and Wales to £161,969. The monthly change from April to May shows an increase of 0.1 per cent. Repossession volumes decreased by 27 per cent in March 2013 to 1,448 compared with 1,981 in March 2012.

• The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 5 per cent.
• The East Midlands experienced the greatest monthly rise with a movement of 2 per cent.
• The region with the greatest annual price fall is Yorkshire & The Humber with a decrease of 2.2 per cent.
• The East saw the most significant monthly price fall with a decrease of 0.7 per cent.
• The most up-to-date figures available show that during March 2013, the number of completed house sales in England and Wales decreased by 15 per cent to 52,090 compared with 61,334 in March 2012.
• The number of properties sold in England and Wales for over £1 million in March 2013 increased by 21 per cent to 625 from 517 in March 2012.
• All regions saw repossessions decrease between March 2012 and March 2013. The region with the greatest fall in the number of repossessions was the North East where repossessions dropped by 39 per cent (March 2013 compared with March 2012). 

The May data for London shows a monthly increase of 0.7 per cent. At 5.0 per cent, the annual

change for London is considerably higher than other regions.

The average price of property in the capital is £375,068 in comparison with the average for England and Wales of £161,969.

Blaenau Gwent experienced the greatest annual price change in May with a movement of 16.6 per cent. Average house now £80,712

Middlesbrough saw the greatest annual price fall with a movement of -10.2 per cent. Average price now £73,522

Metropolitan district

The metropolitan district with the largest annual price increase is Trafford rising by 3.3 per cent.
Bury experienced the highest monthly price rise, with an increase of 6.5 per cent.
Salford saw the most significant annual price fall with a movement of -9.1 per cent.

St Helens saw the greatest monthly price fall with a movement of -2.7 per cent

London

The borough with the highest annual price rise is Wandsworth, with a movement of 11.1 per cent.

Greenwich experienced the highest monthly increase, with a movement of 2.0 per cent.

Newham saw the least significant annual growth,with a movement of 0.4 per cent.

Newham also saw the greatest monthly price fall, with a movemnet of -1.3 per cent.

The number of properties sold in England and Wales for over £1 million in March 2013 increased by 21 per cent to 625 from 517 in March 2012.

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Households in every region expect the value of their home to rise over the next 12 months

Key Points:

• Households in every region expect the value of their home to rise over the next 12 months
• Londoners’ optimism that prices will rise over next year reaches a survey record high
• Confidence about future house prices also reaches record high in the South East and South West
• Households perceive that the value of their home rose over the last month – at the fastest pace since the index started in early 2009

Households perceived that the value of their homes climbed in July, for the fourth consecutive month, according to the latest House Price Sentiment Index (HPSI) from Knight Frank and Markit.

The proportion of the 1,500 homeowners surveyed across the UK who said that the value of their home had risen over the last month hit a new high of 19.8%, while a record low 6.3% indicated the value had fallen. This gives a HPSI reading of 56.8, the highest since the index began in February 2009.

Any figure under 50 indicates that prices are falling, and the lower the figure, the steeper the decline. Any figure over 50 indicates that prices are rising.

July’s reading, up from 53.2 in June, marks the fourth month that the current price index has been in positive territory after 33 months of readings of 50 or under

The index indicates that after nearly three years of falling prices, households are increasingly confident that the value of their property is starting to show some sustained growth.

Households in London (65.3) reported that the value of their home had risen at the fastest rate over the last month, followed by those in the East of England (60.8) and the South East (59.4). Only households in the North West of England perceived that the value of their property had fallen (49.1) during the month. 

The future HPSI (figure 2), which measures what households think will happen to the value of their property over the next year, hit the highest level in three and half years.

The overall index reading for the UK was 69.1, up from 65.9 in June and 61.5 in May, and the highest reading since January 2010.

Regional outlook

Respondents in all regions expect the value of their property to rise over the next 12 months, with the biggest jump in optimism in Wales, where July’s reading of 70.2 is up from 57.4 in June.

Londoners are the most confident that prices will rise over the next year, with a reading of 78.0, the highest reading since the index began in February 2009. They are closely followed by those in the South East (75.5), where households are also more optimistic than at any time since the series started.

Households in the North West are expecting the most modest rise in prices over the next 12 months, with a reading of 62.1, down from 63.7 in June.

In terms of tenure, those with a mortgage are the most upbeat about price rises (74.3). In fact they are expecting larger price rises over the next year than at any time since the series began. Those who own their home outright (70.3) are more optimistic than at any time since January 2010.

Expectations for house price rises also jumped sharply among those who privately rent a property, with the future HPSI reading rising by six points to 68.8 in July.

Echoing the optimism among homeowners, expectations for future house price rises also climbed for those in all bands above 35 years old, who are more likely to be on the housing ladder. Those aged between 45 and 54 (71.3) were the most optimistic, followed by those aged over 55 (71.2) and those aged between 35 and 44 (70.3).

Gráinne Gilmore, head of UK residential research at Knight Frank, said:

“There is no doubt that confidence has returned to the UK housing market in some measure. This can be attributed not only to the “Help to Buy” effect as well as signs of a strengthening economy coupled with expectations that interest rates will remain at record-low levels for several years yet.

“Mortgage borrowers are the most confident that prices will rise this year, and this optimism will no doubt be underpinned by expectations of even more affordable borrowing as mortgage lenders continue to cut their rates.

“Average UK house prices are still more than 10% lower than the market peak in 2007. After their lacklustre price performance in recent years, values in many areas will need to make significant headway to outstrip inflation and show growth in real terms. But the upbeat sentiment index suggests that the ‘green shoots’ of recovery may be emerging in the housing market.”

Tim Moore, senior economist at Markit, said:

"July’s house price sentiment survey is the first indication that strong rises in property values have continued into the second half of 2013. A heady mix of improved household credit availability, low mortgage rates and government incentive schemes has brought house price expectations to their strongest level for three-and-a-half years. 

“House price sentiment among people aged 25-34 years can provide a useful bellwether of first time buyer demand, and this cohort saw a large jump in house price expectations since June. Within the 25-34 years of age category, around five times as many people anticipate an increase in property values over the next 12 months as those that foresee a decline."