House prices in England and Wales fell by 0.2% in September, official figures showed on Tuesday, as falling demand from buyers filtered through to the market. The average price in greater London dropped by more than £6,500 during the month, while in Yorkshire and the Humber it was down by more than £2,200.
During the summer, surveys from estate agents and surveyors suggested that the imbalance between supply of homes for sale and buyers looking for property had tipped away from sellers and the heat had come out of a frenzied housing market. The property website Rightmove reported that in some parts of the country asking prices were falling, while Rics reported falling buyer registrations.
Data from the Land Registry, which is based on completed sales, confirms that the market is easing. It showed the average price of a home in England and Wales now stands at £177,299, up 7.2% on September 2013 but below the peak of £181,383 recorded by the index in November 2007.
The figures show price falls in seven out of 10 regions, with the biggest drop of 2.2% recorded in Yorkshire and the Humber, and the smallest fall, 0.2%, in the south-east of England. Prices were up over the month in Wales, the south-west and the east of England, and there are signs that the confidence seen in London earlier in the year has rippled out to some parts. In the east, prices are now up by 10.9% year-on-year at an average of £197,027.
In London, prices fell by 0.7% in September, the Land Registry said, and the annual rate of price inflation dropped to 18.4%. However, the average price of a home in the capital remained more than double the national average, at £460,521, and in almost a third of London boroughs the average price paid is more than £500,000.
London was also home to the most expensive sale during the month, with a property in Maida Vale changing hands for £13.5m. In contrast, the cheapest sale registered during the month was in Ferryhill, County Durham where a property sold for £15,000.
On a county level, the Land Registry’s data shows stark contrasts in different parts of the country, with some areas recording sharp falls over the month and prices that are still down over the year, and others showing strong growth.
In Blaenau Gwent in Wales, prices dropped by 5.8% in September to an average of £62,578 and are unchanged since September 2013, while in Hartlepool there was a 3% fall and prices are down by 4.2%. Meanwhile in Surrey and Windsor they were up by 1.4% and 1.6% respectively and are 12.5% higher than in September 2013.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The London property market is finally starting to run out of puff, as far as the Land Registry is concerned. However, over the year there was still fairly robust growth of 18.4%.”
The housing charity Shelter said prices were still rising at a rate that was putting homes out of reach for many.
Its chief executive, Campbell Robb, said: “Rising house prices are forcing more people into the ‘rent trap’, or leaving them stuck in their childhood bedroom watching their dream of owning a home slip further away.
“Current piecemeal schemes to help first time buyers are just a drop in the ocean. To give young people and families a real chance of a place to call their own, politicians must commit to building more affordable homes.
“7.2% is a huge rise compared with the lacklustre rise in wages. Pay has increased by less than 1%.”
The figures suggest that fears of a mansion tax have not deterred buyers at the top of the market, after suggestions that the market in homes costing more than £2m. The Land Registry’s figures for registrations in July, its most up-to-date figures one prices paid, showed that 288 properties in London changed hands for more than £2m during the month, a 23% increase on the previous year.
