UK house prices lowest since 2004

House prices in England and Wales fell 0.4% in March 2009 to levels 16.2% lower than March 2008, according to data from the Land Registry House Price Index (HPI).

The average house price in England and Wales is now £152,895, the lowest seen since August 2004. The data is roughly in line with a similar study from Halifax released this week which estimated that the cost of the average home is now £154,716.

The Land Registry HPI is published on a monthly basis by the Land Registry using sales data collected on all residential housing transactions in England and Wales, whether for cash or with a mortgage. The report is bad news for householders hoping to hold onto the shrinking equity in their properties, but may be good news for some first time buyers struggling to meet the cost of climbing onto the property ladder.

All regions experienced a fall in average house prices over the last twelve months, with the South East worst affected, suffering an average fall of 17.6%. However, the North East, South West, Wales and London all experienced modest average house price growth in March 2009 of between 0.6 and 1.8%.

There was some positive news, however, as while prices are still falling, they appear to now be falling at a slower rate, suggesting that we may be seeing the beginnings of recovery in the housing market.

However, the volume of house sale transactions in England and Wales also fell considerably. The number of sales from October 2008 to January 2009 averaged at 35,480 per month, 59% lower than during the same period a year ago, when the average was 85,610.

High value properties saw some of the biggest falls in transaction levels, with the number of properties sold in England and Wales for over £1 million decreasing by 62% between January 2008 and January 2009, from 480 to 184.