Property prices in England and Wales increased at their quickest rate in nearly four years, according to recent data released by the Land Registry.
In its latest monthly property price index, the figures indicated that the average house price in England and Wales during April were 6.7% more than they were during the equivalent period in 2013, taking the estimated average house price to £172,069.
Alarmingly, the staggering upward trajectory of property prices in London were again confirmed in the Land Registryís figures, with their data estimating that the average house rose by 17% in value in the 12 months to April 2014, and an unbelievable 4.2% during April alone- the most severe monthly increase since statistical analysis of the market begun back in 1995.
The lowest yearly price rise of 2.9% was witnessed in the North East of England, highlighting the disparity in risk between the property markets in different geographic areas across the country.
The news marks the latest chapter in the ongoing debate about the current state of the property market within the UK, with market analysts and policymakers alike persistently voicing their concern about the market ëoverheatingí and a new asset ëbubbleí occurring in the near future.
In particular, London and the South East of England have been identified as the most alarming and problematic areas at present, with rapidly rising property prices meaning that a plethora of young workers are struggling to acquire the necessary level of finance to purchase a home. Many other people are taking on huge levels of debt at low borrowing costs in order to attain their desired property, with economists arguing that they are putting themselves at financial risk for when the Bank of England eventually raise their base interest rate from its historic low of 0.5%.
ëWind change in the property landscapeí
However, earlier this week Nationwide Building Society suggested that the housing situation within the capital could be heading towards a ìnatural correctionî.
The mutual’s chief executive, Graham Beale, argued that the property market in London had already begun ëslowing downí, due to apprehension of aspiring homeowners to pay so much for their desired property.
This sentiment has begun to be reiterated by a number of market commentators who have forecasted that property
price increases are likely to slow down as the year progresses.
“In the past six weeks we have seen the wind change in the property landscape, restoring a new calm and steadiness to the market,” said Peter Rollings at estate agent Marsh and Parsons.
“Property prices have plateaued as more property has come onto the market.”
Back in May, the Office for National Statistics released figures that estimated that property prices in the UK increased by 8% in the 12 months to March 2014.
However, the Land Registryís data differs greatly to other measures of price movement in the property market as they are based on real sale prices, measuring the latest price a property is sold for against how much it was bought for in the first place.
The Land Registry data also takes into account cash purchasers, which comprise an estimated 33% of all transactions.