Property price falls mask regional variations

Figures from Nationwide and the Land Registry reveal further falls in average national house prices, underlining the unsettled state of the housing market. Although spring is traditionally a boom time for the market, with fewer transactions compared to what we would normally experience at this time of year, modest increases and decreases in prices are to be expected.

While Nationwide records a slight price drop of 0.2 per cent in April, leaving prices 1.3 per cent lower than a year ago, quarterly figures – usually regarded as being less volatile – actually show a modest rise of 0.6 per cent.

Meanwhile, Land Registry figures for March show a 1.1 per cent decline and an annual fall of 2.3 per cent. But these mask significant regional differences. London experienced a 0.8 per cent growth in annual prices in March, while the North East saw a 9.3 per cent drop. Even London saw changes from borough to borough, with Islington seeing a 7.7 per cent increase, while Bexley fell by 2.3 per cent over the year.

Across the country, Rutland experienced the highest annual price change in March with a 6.9 per cent increase, while Blaenau Gwent saw the greatest annual fall of 19.9 per cent.

This conflicting situation is unlikely to change through much of this year and into 2012. Low levels of confidence and the increased likelihood of an interest rate rise are deterring some buyers from taking the plunge. While a strong uplift in prices looks highly unlikely, so too does a significant plunge. The top end of the market looks much healthier than further down the scale, with mortgage finance easier to come by and plenty of funding options for wealthy buyers.

Private Finance has plenty of expertise when it comes to placing high-value mortgages; talk to your usual consultant for more details.