House prices rise 0.9% in January

Land Registry data shows that 2007 has begun with another rise in house prices for England and Wales. The first month of the year demonstrates an annual house price increase of 7.7 per cent and a monthly increase of 0.9 per cent. This increase has led to the average property now being worth £174,827.

This month is the first time since May 2005 that house prices have experienced annual price growth of greater than 7 per cent in two consecutive months. In January 2006 the rate of annual change in house prices was 3.6 per cent compared with 7.7 per cent for January 2007.

As with last month, the London property market continues to outperform the rest of the country. London can be seen along side Yorkshire & The Humber and the South East as the most consistent drivers behind recent national 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 9.9 per cent compared with the 7.7 per cent increase of England and Wales as a whole.

Key regional observations

All regions in England and Wales experienced average price increases over the last twelve months.

The region with the highest annual price change is London with an increase of 9.9 per cent.

The region with the lowest annual price rise is the North East, with an increase of 5.0 per cent.

Yorkshire and the Humber experienced the highest monthly change, with an increase of 2.2 per cent.

The East Midlands experienced the lowest price change this month with a movement of 0.3 per cent.

Key county and unitary authority observations

Blaenau Gwent is the county with the highest annual price change with an increase of 13.4 per cent. Brighton and Hove, City of Kingston Upon Hull, Carmarthenshire, City of Bristol, Neath Port Talbot, South Gloucestershire and Powys also exhibited annual price increases of over 10 per cent.

No county or unitary authority experienced negative annual price change this month.

Key county and unitary authority observations

Ceredigion experienced the strongest monthly growth in January.

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

Leicester, Isle of Anglesey and Merseyside exhibited no monthly price movement.

Key London borough observations

The borough with the highest annual price increase is Kensington and Chelsea, rising by 17.3 per cent.

The highest monthly price increase was in Camden, with a rise of 1.6 per cent.

Newham experienced an annual growth of 4.3 per cent, making it the lowest performing borough in terms of annual price change.

Newham also experienced the greatest negative monthly price movement, with a fall of 0.5 per cent.

The only boroughs that experienced no monthly movement in prices in January were Bromley and Greenwich.

Sales volumes

In the months August to November 2006, transaction volumes averaged 107,225 transactions per month. This is an increase from the same period last year when sales volumes averaged just above 95,342.

The pattern of transaction volumes in London continues to mirror 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 and 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 31 per cent between November 2005 and November 2006, from 349 to 457.

Sales volumes by price range (London)

The number of properties sold in London for over £1 million increased 22 per cent between November 2005 and November 2006, from 194 to 236.