House sales have recovered to the highest level for seven years, according to the LSL England and Wales house price index.
The index found that there were 90,000 sales in July, which LSL said was a 10% increase in one month as first-time buyers and buy-to-let landlords help the flow of activity.
This was a 21% hike on a year earlier and represents the highest monthly total since November 2007.
London and the South East have seen the slowest growth in house sales between Q2 2013 and Q2 2014, as limited availability of property is impacting sales.
Elsewhere, lower prices and the stimulus of Help to Buy are aiding activity. The biggest boost in sales during April-June 2014 was found in the North West and East Midlands, increasing by a third (32%) on the same period last year.
Alongside increased sales, LSL reported 4.6% annual price growth outside London and the South East.
The average house price has risen to £270,636 – although this is driven by the capital and the South East where prices continue to grow.
In London, annual growth has taken average prices to £560,386 in June, following a £10,850 (2%) monthly rise.
After a temporary slowing of growth in the London market, 24 boroughs have set new peak prices, and in Kensington and Chelsea average house prices are on track to surpass the £2m mark.
However, a dampening of sales activity and more supply starting to come to the market will help control house price inflation in London.
Average prices in Northamptonshire, Bournemouth, and Wiltshire rose in June as the housing recovery starts to spread.
LSL Property Services commercial director David Brown said: “As the common property choice of a new buyer or investor, flats have seen the largest increase in sales during the second quarter of this year, rising by a third (36%) compared to Q2 2013.
“As the market emerges from the chrysalis of regulatory change, sales have climbed 10% in the past month. But chequered supply across the country has created considerable regional variation in sales.
“The tendrils of recovery may be branching out from the centre, but they haven’t yet unfurled to all corners of the country. Outside of London, the South East and East Midlands, prices dropped and stabilised across all other seven regions in June.
“Housing policy should not be led astray by what is happening in prime central London. If London and the South East are removed from the equation, the annual change in average houses prices drops by 5.3% to 4.6%.
“A more thoughtful and prudent housing market is emerging. Lending is stabilising to sustainable levels, and supply and demand is more balanced. Further interventions or tighter rules could fracture the health of the recovery, particularly further afield where schemes like Help to Buy are a necessary tonic spurring new buyers onto the housing ladder.”
bridget.oconnell@estatesgazette.com
