House prices rose 7.8% in 2006

House price growth continued in December, with prices up 0.7 per cent from the previous month for a 7.8 per cent annual increase, according to data from the Land Registry.

This increase means that the average property price is now £173,717.

The year 2006 has concluded with a solid rise in house prices for England and Wales. The past year has seen greater house price appreciation than that witnessed throughout 2005.

During the last three months of 2005 the rate of annual change in house prices averaged 3.3 per cent. For the last three months of 2006 the same figure was 7.2 per cent.

London once again represents the main driving force behind the recent house price growth.

The rate of annual increase in London’s house prices has been greater than that of England and Wales since March 2006. London’s annual growth this month is 10.4 per cent compared with the 7.8 per cent increase of England and Wales as a whole.

Key county and unitary authority observations

Neath Port Talbot is the county with the highest annual price change with an increase of 14 per cent. Brighton and Hove, Carmarthenshire, City of Kingston Upon Hull, City of Bristol, Greater London and Middlesbrough also exhibited annual price increases of over 10 per cent.

Darlington experienced negative annual price change this month with a fall of 0.4 per cent.

Key county and unitary authority observations

Carmarthenshire experienced the strongest monthly growth in December.

Flintshire had the most significant monthly price fall during December with a movement of -1.5 per cent.

East Riding of Yorkshire, Monmouthshire, City of Peterborough, and Nottinghamshire exhibited no monthly price movement.

Key London borough observations

The borough with the highest annual price increase is Kensington and Chelsea, rising by 16.3 per cent.

The highest monthly price increase was in Kensington and Chelsea, with a rise of 2.5 per cent.

Barking and Dagenham experienced an annual growth of 4.1 per cent, making it the lowest performing borough in terms of annual price change this month.

Greenwich experienced the greatest negative price movement this month, with a fall of 0.3 per cent.

The only borough that experienced no monthly movement in prices in December was Bexley.

Sales volumes

In the months July to October 2006, transaction volumes averaged 106,045 transactions per month. This is an increase from the same period last year when sales volumes averaged just above 96,735.

The pattern of transaction volumes in London continues to broadly follow the rest of the country. Price index volatility is greater in areas where recorded sales volumes are low. Index volatility leads to erratic and high changes in price.

Some of the areas that typically have very low transaction volumes include but are not limited to the following: City of London, Rutland, Isle of Anglesey, Merthyr Tydfil, Blaenau Gwent, Ceredigion, Torfaen.

Data for the two most recent months are not used as comparisons due to the lag in the registration of sold properties.

Sales volumes by price range (England and Wales)

The number of properties sold in England and Wales for over £1 million increased 58 per cent between October 2005 and October 2006, from 287 to 453.

Sales volumes by price range (London)

The number of properties sold in London for over £1 million increased 69 per cent between October 2005 and October 2006, from 157 to 265.