House prices fall as sales drop

The housing market has weakened, amid a plunge in sales volumes, the most comprehensive survey of the sector has revealed.

House prices in England and Wales fell by an average of 4% during the last three months of 2001, figures from the Land Registry showed.

Most costly areas (outside London)

1: Windsor & Maidenhead, £272,739

2: Surrey, £227,256

3: Wokingham, £210,143

4: Buckinghamshire, £209,038

5: West Berkshire, £194,716

Source: Land Registry

The average price of a home over the quarter was £118,827, compared with the £123,856 reported for the July to September period.

But prices were still an average of 8.46% higher in the October to December period than a year before.

The data, based on actual transaction figures, echoes reports by estate agents and mortgage lenders that the housing market, which rose strongly over the summer, cooled following the 11 September attacks.

Many observers say the market has since recovered, with the Halifax on Wednesday reporting that house prices rose by 1.6% during January.

Erratic market

London led the decline during the last three months of 2001, seeing property prices fall almost 6% to an average of £203,499.

Cheapest areas

1: Blaneau Gwent, £38,195

2: Merthyr Tydfil, £39,360

3: Derby, £41,518

4: Stoke on Trent, £46,847

5: Rhondda Cynon Taff, £49,416

Source: Land Registry

The most buoyant area was East Anglia, where properties cost an average of 3% more in the October to December period than they had during the previous three months.

But overall regional figures hid local differences.

In Wales, for instance, prices in Rhondda Cynon Taff rose 5.4% over the quarter, yet fell more than 9% in Merthyr Tydfil.

In the Gloucestershire area, prices fell almost 7%, yet rose 7% in South Gloucestershire.

In the capital, the average price of a home in the most expensive borough, Kensington & Chelsea, fell by 12% to £566,794.

In Newham, the second cheapest borough, prices rose 12% to £128,132.

The erratic price differences are likely to be linked by statisticians to a 7% slump in the volume of sales over the quarter.

The number of completions fell by more than 10% in southern counties and London, with the market for homes priced above £1.5m suffering most.

Winners and losers

The cheapest area to buy a house in England and Wales was Blaneau Gwent, where homes cost an average of £38,195.

Outside London, Windsor and Maidenhead was the most expensive area, with buyers needing to splash out £272,739.

Semi-detached houses have proved the most resilient housing investments rising by 12% in value over the year, despite a 3% price decline over the quarter.

New flats were 3.7% cheaper in the October to December period than a year before.