House prices fall for 18th successive month

Friday, 27 March 2009 11:57 AM

The Land Registry house price index (HPI) released today has shown the eighteenth successive month of house price falls in England and Wales.

The February 2009 data show a monthly decline of two per cent, bringing the average property price down to £153,862, a price level not seen since September 2004.

The annual house price drop now stands at 16.5 per cent according to the Land Registry, with sales volumes remaining low in comparison to last year's levels.

The average number of recorded property transactions per month was 38,830 between September and December 2008. In the same period in 2007, sales volumes averaged 95,679.

The number of properties sold in England and Wales for over £1 million decreased by 55 per cent between December 2007 and December 2008, from 421 to 188. In the capital, an annual house price change of -15.6 per cent was witnessed in February 2009. In Cardiff, this was -9.4 per cent.

Commenting on the HPI, Kesh Thukaram, managing director of smartlandlord.co.uk said: "These figures aren't going to come as a surprise to anyone. But that doesn't change the huge impact house price falls are having on the private rented sector. No landlord, whatever his position, can afford to ignore falling prices.

"If you have to option to gear up, it's a fantastic time to get into the market and pick up some bargains. One landlord I spoke to recently said he had been waiting for a recession for years."

All regions in England and Wales experienced a decrease in their average property values over the last 12 months. The region with the most significant annual price fall was the West Midlands with a movement of -17.7 per cent. Both the south-west and Yorkshire & The Humber experienced the smallest monthly falls with movements of -one per cent.

The Vale Of Glamorgan experienced the smallest annual price fall in February, with a movement of -4.4 per cent, while the Land Registry found Bridgend experiencing the greatest annual price fall with a movement of -19.7 per cent. However, it is important to note the very low sales volumes involved.

In London, the borough with the smallest annual price fall is Barnet, with a movement of -10.3 per cent. Islington experienced a movement of 1.2 per cent, making it the borough with the highest monthly increase.

Simon Rubinsohn, Royal Institution of Chartered Surveyors (Rics) chief economist, added: "The 2 per cent drop in house prices in February according to the Land Registry brings the peak to trough decline in prices to almost 17 per cent. This is broadly consistent with what is being suggested by most other house prices indices. Lower prices and the cheap cost of money has begun to fuel an increase in buyer interest as reflected in the Rics 'new buyer enquiries' series which has risen for four consecutive months.

"This turnaround in the appetite of potential house purchasers is now becoming more visible in actual transaction data and confirms that the increased number of people registering with estate agents are doing more than just window shopping. Land Registry numbers show sales edged up in December from the November low and the more timely mortgage approvals figures indicate this more positive trend has further to run over the coming months although activity will still remain at relatively depressed levels."

Sarah Garrod

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