House prices continue to fall

House prices in England and Wales dropped 0.4 per cent in December, bringing the annual increase down to 6.7 per cent, according to data from the Land Registry.

This month’s data provides evidence of a downward trend in house prices. Although the annual growth rate remains positive, this month’s price fall is a clear indication of a weakening market.

This month is the first time since the minor slowdown in 2005 that average prices for England and Wales have experienced negative monthly change.

Average annual price change

This month’s 0.6 per cent rise in London prices is greater than the average for the country as a whole.

London’s relatively high annual change of 14.3 per cent is being sustained due to very high monthly increases at the start of the previous twelve months.

Towards the end of 2006 and at the start of 2007, London experienced very high price growth. However, the monthly price changes for the last three months show growth rates falling to far more modest levels.

London's average house price for December 2007 stands at £354,625 whereas the average price for England and Wales is £184,469.

Price change by region

All regions in England and Wales experienced increases in their average price over the last 12 months.

The region with the highest annual price change is London with an increase of 14.3 per cent.

The region with the lowest annual price rise is the East Midlands, with an increase of 0.5 per cent.

The North East experienced the highest monthly rise, with an increase of 2.2 per cent.

The East Midlands experienced the largest negative price movement this month with a change of -3.3 per cent.

Price change by county

Greater London experienced the highest annual price change with an increase of 14.3 per cent. Twelve other counties and unitary authorities also exhibited annual price increases of 10 per cent or more.

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

The City of Nottingham experienced the smallest annual price change, with a movement of 1 per cent.

Blaenau Gwent experienced the strongest monthly growth in December with an increase of 2.1 per cent.

The Isle of Anglesey had the most significant monthly price fall during December with a movement of -2.8 per cent.

Eight county and unitary authorities exhibited no monthly price movement.

Price change by metropolitan district

The metropolitan district with the highest annual price increase is Oldham, rising by 10.5 per cent.

The highest monthly price increase was in South Tyneside, with a rise of 1.7 per cent.

Knowsley experienced the most significant annual price fall this month with a movement of -0.1 per cent.

Knowsley had the most significant monthly price falls during December with a movement of -2.4 per cent.

Price change by London borough

The borough with the highest annual price increase is Kensington and Chelsea, rising by 28 per cent.

The boroughs with the highest monthly price increases are Lewisham and Tower Hamlets, with a rise of 1.6 per cent.

Newham experienced an annual growth of 7 per cent, making it the lowest performing borough in terms of annual price change.

Camden experienced the most significant monthly price fall during December with a movement of -1 per cent.

Sales volumes

In the months July to October 2007, transaction volumes averaged 103,374 transactions per month. This is a decrease from the same period last year when sales volumes averaged 117,086.

The pattern of reduced 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 reported 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.

Sales volumes by price range (England and Wales)

The number of properties sold in England and Wales for over £1 million increased by 31 per cent between October 2006 and October 2007, from 513 to 671.

Sales volumes by price range (London)

The number of properties sold in London for over £1 million increased by 20 per cent between October 2006 and October 2007, from 281 to 338.