The average house price in England and Wales has risen 7.71% to £199,184 so far this year according to the latest data from the Land Registry.
The data says house sales are also up by 23.76%
Land Registry’s latest residential property price report covering the period April to June 2006 shows house prices has risen significantly compared to last year’s annual increase of 5.43% for the same period.
Sales in England and Wales were up by 23.76%, compared with the same period in 2005 while in Greater London they increased by 26.69%.
All regions in England and Wales showed an increase in average prices according to the Land Registry and there has been a sharp increase in the number of properties worth over £1m sold. The data reveals 1246 properties over £1m were sold compared to 718 for the same period in 2005, of these 795 were in greater London the average property price has increased by 8.29% from £293,349 in 2005 to £317,679 for the same period in 2006.
The continued stability in the housing market has also caused Nationwide to review its prediction for house price growth this year to 5%.
The lender has somewhat pessimistically state at the beginning of the year annual house prices would grow by between 0% and 3%. But it says, the housing market has proven its resilience in the face of deteriorating affordability suggesting there is still enough demand in the market to support prices.
Moreover the revival of the London market seems likely to continue, Nationwide says, and is likely to boost neighbouring regions as a result.
While the Nationwide forecast for house price growth contradicts the data from the Land Registry the lender explains it expects the market to ease over the coming months as the rise in the Bank of England base rate bites.
Fionnuala Earley, Nationwide’s group economist, says while the rise in the base rate came as a surprise to many in the City her initial view, in advance of the publication of the Inflation Report tomorrow and minutes of the monetary policy committee meeting next week, is the Bank acted in a pre-emptive manner, which is likely to have only a modest impact.
Earley says: “Money markets had anticipated a rise, so fixed mortgage rates had already risen to around 5.2% from around 4.8% in early April. Tracker mortgage rates will now rise, but less than half of borrowers currently choose these. Also, the impact of a single rate rise is relatively small. On a typical first-time buyer loan, the monthly mortgage payment would increase by around £17. However the rate rise will affect demand at the margins and will cause some to abandon plans to buy, at least for the time being.”
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