House prices up by £85,000 – so why is the North East seeing no growth?

With the average house price being reported by Lloyds to have risen by £85,000 over the past five years, I was invited onto BBC News to comment on the property market.

The research shows that average prices have risen by a staggering 41% to £290,000 but, as I am always keen to remind people, averages can be very misleading.

And the last five years in particular is not the best barometer of house price growth as, in many areas, prices have not yet recovered to their 2007 levels, just before the credit crunch. This ‘rise’ ignores the previous ‘falls’ areas saw from 2007/8 through to 2013 and for some beyond.  

Regional differences cannot be underestimated and can even affect properties on the same street, with different postcodes and property types experiencing different growth rates or even stagnating.

You may find a family home going up in price but, further down the street, there are flats which aren’t moving at all and, in fact, still haven’t recovered to their 2007 levels.

Elsewhere, properties which have been doing quite well may now to start to fall in value.

A quick snapshot of prices around the country:

• London, East Anglia and the South East have experienced great growth, which is now slowing naturally, partly as a result of the government cap on mortgage lending
• In some areas of London, prices have risen by 40%-80%
• The Midlands isn’t doing too badly, but not performing anywhere near its pre-credit crunch rates
• The North hasn’t really seen any growth for 10 years and, in the North East, prices are still 9% lower than 2007

What we’re seeing is the fundamentals of the property market completely changing – and I’m not sure the government, industry and consumers really understand the changes that are happening.

For buyers and sellers, my best advice is to monitor your micro-market – right down to your chosen postcode if possible – closely, and don’t pay too much attention to the headlines. The best person to advise you is a good local agent that really understands the market you are buying and or/selling in.

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