The latest snapshot of the state of the housing market in England & Wales should carry an ‘X’ certificate. The monthly report from HM Land Registry is widely regarded at the most authoritative although a certain amount refers to what was happening three months ago.
Prices continued their slide in February falling 0.8% on the month before, the sixth consecutive monthly fall in a row. That’s two continuous quarters of negative growth or the accepted definition of a recession when talking about national output! House prices according to the Land Registry are now 1.7% lower than they were 12 months ago although this average masks wide variations.
Of greater concern however is the fall of in transaction volumes. There were 30% fewer than there were in December the previous year with just 54,812 homes sold. Although we saw a spike at the end of 2009 in the rush to beat changes to Stamp Duty Land Tax this is way below the average 62k. In December 2006 over 122k homes were sold!
Not everyone suffered though. Sales of homes over £2m were 30% up, in London they were 37% higher but across England & Wales sales of homes between £150-£200k were 45% lower. Prices in Islington were 9.4% higher over the year and in Hartlepool prices plunged 3.2% in February alone!
2011 is going to be a bumpy ride with more losers than winners and property remains an asset class best avoided by widows and orphans for the time being.