A new monthly report that claims to offer a more up-to-date, more accurate and more comprehensive view of the housing market in England and Wales than those provided by the likes of Nationwide, RICS and Rightmove has launched.
Residential property investment firm London Central Portfolio has teamed up with Acadata to address what it calls “a number of conspicuous issues” with existing industry data.
LCP’s chief executive Naomi Heaton said: “Samples offered by high-end estate agents tend to be small and non-representative.
“Nationwide’s house price index represents just 12% of the market, excludes cash purchases and is based on mortgage approvals, not actual sales.
“Rightmove use asking prices data only, while RICS’ residential market survey is largely qualitative.
“Land Registry’s own published full report is based on a restricted sample, excludes new builds and has a longer time lag.”
She added: “Looking to overcome these problems and provide a single reliable residential index, our new report, based on every single sale transacted through Land Registry, will provide a much more accurate and in-depth analysis on how the market as a whole, including the controversial luxury and new build sectors, have really fared in prime central London, Greater London, England and Wales.”
The new index revealed that house prices in England and Wales recorded their third successive monthly price fall (at -1.4%) in December last year, resulting in the largest quarterly price fall since February 2009 (at -4.7%).
According to its data, the average house price in England and Wales is £284,855.
Not including London, the average house price in England and Wales is £250,797.
Meanwhile, LCP estimates that annual transactions fell 2.3% last year to 902,100, which is 29% below that prior to the global financial crisis.
On a quarterly basis, transactions in the final quarter of 2017 were down 3.8% to 236,899, it calculates.
Heaton said: “With prices and transactions both beginning to fall, there is a serious need to address the affordability issues within the sector and support the building of more low-cost housing outside London.”
LCP’s data showed that the market in Greater London was slowing, with transactions continuing to decrease.
They were down 7% over the quarter to 23,200 and 10% over the year to 93,381.
Average prices in Greater London fell below £600,000 for the first time since 2016 (£598,558), following a fall of 3.8% in the final quarter of last year.
Meanwhile, prices in prime central London stabilised during the same period, according to LCP.
Nonetheless, transactions were “significantly” down (by 9.5%) across the year to 4,183, which is the lowest number of annual sales on record and a 34% drop since 2013.
The new-build sector shows subdued activity in prime central London, with transactions down 13.4% and quarterly prices down 5%.
In England and Wales, the most recent figures for new-builds, which date from June 2017 (unlike overall monthly, quarterly and annual results, for which there is a two-month time lag, new build results lag by two quarters), showed that the price differential between new and old stock has reached nearly 30%.
New-builds in England and Wales are now 65% more expensive on average (£345,118) than they were in December 2006, compared to 38% more for old stock.
Heaton said that foreign investors who have bought new build property in London, Manchester and Birmingham were in many cases struggling to let them out for the rental yields they needed to achieve, and laid part of the blame on agents.
She said: “I am staggered by the fibs that are told to these foreign investors.”
Citing the example of a recent development in London, she said that the reputable firm of agents selling the units were quoting estimated gross rental returns of 4.3%.
In reality, investors would be “doing really well” to achieve 3.5% she said, and that rental estimates quoted by agents to foreign investors on new build properties were often “unattainable”.