UK house prices are at the same level as a decade ago once London homes are stripped out, according to new research.
The
average property value recorded by monthly Land Registry figures stands
at £177,299, but with Greater London removed the figure across England
and Wales stands at just £133,538.
This
is in line with the £133,126 level seen in July 2004 and should dispel
fears of a new national house price bubble, claims analysis by property
investment specialist London Central Portfolio.
But ONS figures also show wages adjusted for inflation back to 2004 levels too, with workers suffering their own lost decade.
Back to the future: House prices are stuck at 2004 levels once the London property market is removed
A
gulf between London house price inflation and much of the rest of
Britain has skewed headline property index figures in recent years.
The
Land Registry September figures showed London house prices up 18.4 per
cent annually, while the overall England and Wales figure was 7.2 per
cent and in Yorkshire and the Humber prices rose by just 1.4 per cent.
The
average price of £177,299 now stands just 2 per cent below its peak
before the financial crisis hit, but LCP’s number-crunching shows that
with London removed prices are much further away from their record level
on the index.
Its
figures post an average price for England and Wales excluding London of
£133,538 - 16 per cent below the December 2007 peak of £158,494.
Naomi
Heaton, of LCP, said: These figures suggest that housing stock outside
of Greater London is still affordable. The slow recovery indicates that
positive economic sentiment and the feel-good factor are still missing.’
LCP
says that once London is removed from the equation, the current
residential property market growth rate stands at 3.1 per cent and if
that continues it will take five more years to regain the 2007 peak.
She
said: ‘Residential property prices in the UK move in cycles. Periods of
growth are generally followed by periods of consolidation. We should be
entering a new growth cycle given prices are only at the same level as
10 years ago and are, without doubt, suppressed currently.’
LCP
has previously criticised the monthly Land Registry figures, as they
exclude many property transactions. It does not include new-build homes,
which make up a sizeable chunk of the market, and also excludes sales
of properties held long term due to its repeat sales regression. This
statistical trick aims to compare like-for-like sales and so the index
does not include properties that have not been sold at least twice since
1995.
The
Land Registry’s own all transactions data shows the average house
prices as considerably higher, at more than £250,000. Despite questions
over the accuracy of the average price, the Land Registry’s monthly
index is useful for judging trends, similar to most house price reports
with a long track record.
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