Annual house price growth slows as South East cools
A cooling of the London and South East property market in December held back annual house price growth across England and Wales, according to the LSL/Acadata house price index.
The average price of a home across the two countries in December was £278,997, taking annual price growth back to single digits at 9.6%, compared to 10.6% in November.
Adrian Gill, director of Reeds Rains and Your Move estate agents, explained: "The recent Christmas chill has emanated from London and the South East. Typically, the South East pocket of the country has been out in front of the pack, but we’re seeing an about-turn.
"Property values in the capital and surrounding areas are beginning to concede ground after significant advancement over the last year. Average house prices dropped in a third of all London boroughs in the month to November, with Southwark experiencing the sharpest fall in average values of 3.1%."
Pausing for breath
However, the data revealed that price growth across the rest of England and Wales remained steady in December. Gill said values were "pausing for breath after a chorus of uninterrupted monthly climbs since May 2013".
Throughout the course of the year, prices of expensive homes rose quicker than the cheapest property across England and Wales. By the end of 2014, properties worth more than £250,000 saw average annual growth of 10.7%, while those valued less than £153,000 rose by just 2.9%.
During 2014, the total number of home sales increased by 18% year-on-year, reaching the highest level recorded since before the onset of the credit crunch in 2007.
Gill said: "While the bulk of this uplift happened in the first half of the year, 2014 finished at a sprint too – with completed house sales in December jumping 17% on the previous month, against the usual seasonal tide, as the Chancellor’s remodelling of the age-old stamp duty barrier flooded the market with buoyed consumer confidence."
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.
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