House price rise disguises regional differences

Land Registry figures show house prices rose by 2.5% in London in March alone, whereas Middlesbrough saw 5.1% fall

House prices in England and Wales increased by 0.1% in March, according to the latest Land Registry report, but the headline figure disguised a mixed pattern of rises and falls around the regions.

London continued to record the strongest growth, with prices rising by 2.5% in March alone. The annual rate of price growth in the capital hit 9.6% and the average price reached £374,568. In contrast, prices in Middlesbrough fell by 5.1% in March and were down 16.5% year-on-year to an average of £69,049.

Across England and Wales prices were up by 0.9% on March 2012, but in Yorkshire, the east Midlands and the north-east and north-west of England prices were lower than in March 2012. The biggest faller is the north-east where values have dropped by 5.5% to an average of £97,033.

In Kensington and Chelsea the average property price is now £1.1m – 12.2% higher than in March 2012

The Land Registry's data showed strong sales of homes worth £1m or more in January, with the number increasing by 28% on the same month of the previous year at 610. The number of £2m-plus properties changing hands was up 52% at 140; of these 113 were in London. In Kensington & Chelsea, the UK's most expensive neighbourhood, the average property price is now £1.1m – 12.2% higher than in March 2012.

Figures for property purchases registered in March underline the huge differences of prices being paid around the regions, with the 47,600 registrations ranging from £14,000 to £12.5m.

In recent years the London property market has been buoyed by overseas investors seeking a safe haven for their money. The recent weakness of the pound and events in other countries have bolstered demand even further, and only recently the UK's most expensive home went on sale at a reported £250m.

Giles Hannah, managing director of estate agency VanHan, said cash was continuing to come into the capital from domestic and overseas buyers.

"International buyers, particularly from Asia, are fuelling demand for best-in-class properties and are snapping them up at 10%-14% discounts as a result of the weakness of sterling compared with their own currencies," he said.

"UK-based buyers are also highly active and are seeing investment in London property as an alternative to a pension, and a way of maintaining and growing their wealth."

He added: "We have also witnessed a rise in French high net worth families relocating to London owing to the increased taxes in France, creating a shortage of supply in the £5m-plus bracket and fuelling price rises."

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Article source : http://www.guardian.co.uk