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House prices fall in March but affordability issues still rife

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  • 28/04/2016
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House prices fall in March but affordability issues still rife
House prices fell in eight out of 10 UK regions in the month to March hitting an average of £189,901 in England and Wales.

The only areas to experience a slight monthly increase in prices were London and the East of England, both up 0.2% in March.

However, Land Registry data found that on an annual basis, prices were up 6.7% overall and 13.9% in London against March 2015.

Richard Sexton, director of chartered surveyor e.surv said affordability is a continuing issue for homebuyers.

“House prices are struggling right now, having failed to pick up following last month’s dip”, said Sexton.

“And while a strong lending environment is helping prospective buyers, the affordability of current high prices is proving a final hurdle to home ownership. Slow and steady is the mantra.

“Some areas are feeling the pressure more than others. As the East of England tracks London, it’s clear that commuters are increasingly sizing up the area as an alternative to the pricey London market. There’s a danger this popularity could price out some first-time buyers, but with saving initiatives including the Lifetime ISA potentially able to boost deposit savings, the area remains a good option for many compared with the more expensive home counties.”

Andy Knee, chief executive of LMS, said government schemes weren’t doing enough for home buyers.

“A monthly dip from February to March will cause hopeful home uyers to breathe a sigh of relief that house prices have not stretched further out of reach”, he said.

“But year-on-year, a 6.7% rise across England and Wales is cause for concern. In London particularly, where house prices rose 13.9% annually to exceed an average value of £534,000, home ownership is fast become possible for only the very wealthy.

“Despite government intervention to aid first-time buyers, such as Help to Buy, Starter Homes and the Lifetime ISA, these schemes fall short of making property more affordable for millions.”

Despite affordability constraints, the Land Registry study found that the number of property transactions had increased in the quarter from October 2015 to January 2016 to an average of 74,374 sales per month, up from 73,744 in the same period a year earlier.

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