The six major UK house price indices show an average of 8.7% growth for the 12 months prior to October 2006. This is a 0.4 % increase on the previous month. (See Graph 1.)
The housing market is showing no signs of cooling down driven primarily by the continued imbalance between supply and demand. The average house price, taken from the average price provided by all six major indices is £195,267, up from £194,151 in September. (see Graph 2).
Asking prices for homes in England and Wales rose by 1.3% this month making November the third month in a row of consecutive price rises. Asking prices in England and Wales rose by 0.5% over the last year. Greater London asking prices rose by 1.6% this month, but the largest regional monthly rise was 3.1% in the North. Over the last six months house prices have risen in all but one region (east Midlands).
The number of new apartments has grown 4% during the past year, while experiencing a price fall of 0.8% during the same period, providing further evidence that the demand for new apartments is in decline.
While the national average plot size has decreased by 0.2% last month to 968 square feet, the proportion of apartments being built has increased to 62%. Developers are being driven to build an increasing number of properties on a decreasing amount of available land. Wolsey Securities latest statistics show the average plot size has decreased by 2.3% since August 2005.
A survey by haart estate agents has revealed that a mainline railway or tube station located within two miles of a property can add an average 12% or £20,000 to the average house price. Also high on people’s list of priorities are good schools, a vibrant social scene and open space. In contrast, derelict houses are the biggest turn-off for buyers, with noisy, late licence venues and derelict land following close behind. Nightmare neighbours can also slash values by 7%.

What the experts say

Mike Ratcliffe, Chief Executive of Wolsey Securities:
“During the past year, the number of apartments we have funded has increased. This has also affected the national plot size, which has decreased by 2.3% over the past 15 months.”
Warren Bright, Chief Executive of propertyfinder.com:
“North of a line from Cheltenham to Chelmsford, there is a dramatic change in sentiment on the housing market. The strong performance of the City is driving the economy in the south, with rich bonus pickings supporting prices.”