Commenting on the index, Dr Peter Williams, chairman of Acadametrics,said, “House prices in England and Wales fell by 0.6% in May making this the third consecutive month of nominal price falls recorded by the FT index. Nevertheless, these figures do challenge the perception of a housing market in steep decline as suggested by some other indices.
“The differences are, firstly, that the FT index is based upon all property transactions in England and Wales (i.e. cash sales and mortgage backed transactions) and is not influenced by, for example, the current mortgage policies of lenders and by any reduction/redirection in lending. Secondly, the FT index reports on final transaction prices, as distinct from the asking and mortgage offer prices reported in all but one of the other house price index series.”
“The market is definitely deteriorating but the situation is not as dire as some suggest. However, such is the space given by some newspapers to the story that house prices are dropping off a cliff that confidence may now be so undermined that prophecies of yet further falls may well prove self fulfilling.”
On an annual basis, prices increased by 2.7%, 1.2 percentage points down from the 3.9% recorded in April, according to the index. This is the ninth successive month in which the annual growth rate has fallen and it is now at its lowest since June 1996. The annual rate of growth has been declining by 1% point each month since October 2007.
London prices continue to trend down, but an annual growth rate in the capital of 8.5% (averaged over the past three months) is still some 3% points higher than the next highest region.
Outside London, the South East (5.3%) has recorded the largest annual increase. Seven of the ten regions in England and Wales now have an annual growth rate of less than 3%. Four regions - the North West, East Midlands, West Midlands and Wales - have an annual rate below 1%.
