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Transactions recovered in June data but ‘hardly reflect’ market – Jeremy Leaf

  • 16/08/2016
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Transactions recovered in June data but ‘hardly reflect’ market – Jeremy Leaf
June data from the Land Registry broadly shows average house prices up by 1% and a recovering market, but the figures don’t capture the falling transactions since the leave vote, say commentators.

A robust market across all regions except the West Midlands and the North East drove annual inflation of 8.7%, lifting the UK average property price to £213,927.

Eastern England saw the greatest value increase over the last 12 months at 14.3% with the south east showing a regional monthly high of 1.5%. The North East saw the lowest annual price growth at 1.5%, with the West Midlands and the North East falling -0.2% on a monthly basis.

However, the -55.4% transaction drop off in April, post-Stamp Duty change saw buyer and seller activity starting to recover in May and June but none of this mirrors the subsequent market drop off, said former RICS chairman and estate agent Jeremy Leaf.

“These figures are interesting to an extent but their historic nature means they don’t really reflect what is happening on the ground now,” he added. “Shortage of stock continues to drive up house prices he said and the uncertainty will continue until September after the holidays,” said Leaf.

“Transactions are more important than headline prices as it is important for the health of the market that people are moving and there is plenty of activity. This has more impact on the economy than what is happening with house prices.”

Andrew McPhillips, chief economist at Yorkshire Building Society, said price inflation in June was largely driven by the buying and selling frenzy ahead of the March Stamp Duty change with activity falling off afterwards.

“Although we are likely to see fluctuations in demand in the short term due to uncertainty following the result of the EU referendum, the underlying lack of supply will remain a constraint on market activity and is likely to push up house prices in the long term.”

He added this will make house prices unaffordable for an increasing number of people unless the country builds more homes to meet demand.

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