Haringey tops chart with house prices up 12.5 per cent in May but transactions continue to fall across London
- Credit: Archant
Haringey and Camden both performed well in terms of asking prices last month, but transaction numbers are still falling as stamp duty shocks leave only the most motivated buyers in the market
House prices reached a new peak in May according to Your Move’s latest House Price Index, with election campaigning apparently having little impact on price growth across England and Wales.
Haringey say the biggist rice in asking prices, increasing 12.5 per cent to an average of £645,872 largely spurred on by flat sales.
Neighbouring Islington has come bottom of the pile to as prices fell 10.4 per cent to an average of £711,374 compared to last April.
Camden placed third with house prices increasing 3.5 per cent on both a monthly and annual basis with average prices in April at £1.07 million.
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Prime central property performed well, up 8.8 per cent annually in top of the polls Kensington and Chelsea and 9.7 per cent in the City of Westminster.
The average house value is up 4.8 per cent in the last 12 months, and 0.3 per cent in the last month. London is lingering in the slipstream, however, with sales in the three months to the end of April down 29 per cent on last year and 2.7 per cent growth marking the second lowest annual rise since March 2012.
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April 2016 was somewhat anomalous given the introduction of a 3 per cent levy on second homes, which saw the market surge as buyers sought to beat the rush.
Even compared to 2015, transactions in greater London are down, and fell 19 per cent in the three months to the end of April.
Average prices in London are now £615,838, an increase of just 0.1 per cent on March.
So what does the future hold? With sales in London down in April alongside a fall in prices, many will be quick to point the finger at Brexit and with the pound down a number of commentators have looked poorly upon Theresa May’s decision to call an election on 18 April.
Managing director of Glentree International, Trevor Abrahmsohn labelled the result “disastrous” for the country as people hold off until more certain times. “Elections, Referendums, Budgets all have one thing in common, they instil concern among homebuyers and sellers such that they ‘sit on their hands’ until the outcome is better known,” he says. “Continuity and stability (both economic, fiscal and political) is good for the liquidity of any market and we have seen a fair number of these events in the last year, haven’t we?”
However, the election result could see overseas investment and those at the top end of the market take advantage of a weak pound.
“Here’s the paradox; in the upper value ranges above £5 to 10 million, where the international segment of the market is profound, anything that creates uncertainty is a good thing, particularly where the value of the pound drops against the major currencies of the euro and dollar. This could seduce a number of buyers to the Capital which the market badly needs to overcome the substantial hurdles of Stamp Duty and Non Dom changes.” The relative stability of the England and Wales market as a whole and decline in values in the months leading up to the announcement suggests that poor performance in the capital has been the outcome of tax increases on higher value properties.
“Since the Ssamp duty and buy-to-let changes the residual purchasers in the market place today are those who ‘have to’ buy for one reason or another. The frivolous ones who ‘would like’ to buy or ‘wouldn’t it be nice’ to buy have been put off by the obstacles,” says Mr Abrahmsohn.
Despite the pyrrhic victory of the Conservatives, Mr Abrahmnsohn is optimistic about the market.
“Personally, even though the Election process was ‘a dog’s breakfast,’ I don’t think that it will make much difference and, in fact, the first Budget of the new administration, in the autumn, will be muted and less radical than it would have been otherwise. Therefore, there are no ‘storm clouds brewing’ that we can anticipate at the moment.”
Oliver Blake, managing director of Your Move and Reeds Rains estate agents, said: “There was a lot of talk about housing from the parties in their election manifestos, it’s now time for those words to be put into action.
“The market remains resilient... but we need to urgently address the serious blockages in housebuilding holding back labour mobility and economic competitiveness in too many areas of the country.”