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House price growth remains steady with positive signs for autumn – research

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  • 17/09/2018
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House price growth remains steady with positive signs for autumn – research
House prices slightly rose on a monthly basis in August by 0.1%, while on a yearly basis price rises remained steady at 1.8% for the third month in a row, according to the latest figures released by Your Move.

 

According to Your Move, the average home in England and Wales is now worth £303,199, up £5,300 on the previous year.

However, transactions in 2018 dropped to their lowest in five years, although every region and 79 of the 108 unitary authority areas covered recorded annual price rises.

Meanwhile, data released by Right Move found monthly prices rose by 0.7% in September matching the average since September 2011, while annual prices remained muted at 1.2%, with an average asking price standing at £304,061 against £301,973 in August.

 

Your Move regional overview

Your Move’s data showed London posting an annual price increase of 3.6% in July. The West Midlands, East Midlands and North East also all continue to record rises above inflation. The South East, where price rises were weakest, nevertheless saw its annual growth increase in July, bucking the trend nation-wide.

Broadly, the market is flat across regions, and transactions are low – down 0.1% in August compared to July with an estimated 79,900 completed. Annually they are estimated to be down 4% on the same period in 2017, and at their lowest in five years.

The real-terms fall in prices in many regions is likely to help first-time buyers, however, and many expect these to be the dominant players in the market this year. Housing related announcements expected in November’s Autumn Budget may also offer more help.

Outside London, the top regions for growth remained unchanged in July, with the West Midlands up 2.9% annually, East Midlands up 2.7% and North East up 2.6% topping the table. Growth rates in the first two slowed, while they remained unchanged in the North East, but all three continued to report increases above inflation.

The West Midlands conurbation saw prices up 4.7% – among the strongest growth of any unitary authority area.

Other strong performers include Tyne and Wear up 4.8% and Darlington up 4.4% in the North East, and to a lesser extent in the East Midlands with prices in Leicestershire up 3.7% annually.

 

Surging regions

They are all put in the shade, however, by surging prices in some lower performing regions: Bournemouth, up 6.4% against 1.2% for the South West region as a whole; West Berkshire with a 12.7% annual price rise compared to the 0.2% trend in the South East.

Monmouthshire, already the most expensive local authority area in Wales, topped the table,with overall prices up 14.0% annually against 2.1% for all of Wales. The average price paid for a detached home in the area has risen £60,000 from £325k in July 2017 to £385,000 one year later.

The South East, with the weakest growth, also saw the biggest drop over the year, in Slough, where prices are down 6.6% annually. That is largely a result of a lack of new build homes in the data, with just one new build sale recorded at the Land Registry for the period between June and August, compared to 43 in the same period last year.

Despite the relative slowdown across regions, the clear majority of areas still continue to grow, with almost three quarters showing annual increases in prices in the year to July.

The capital started the year recording the biggest monthly fall in prices since the financial crisis, acting as a significant drag on the market. Now prices are up 3.6% in the year to July at £625,040.

Some other areas also continue to see good growth. Redbridge up 6.5% annually to £477,196; Kensington and Chelsea, still the most expensive borough with average prices of £1,834,640 is up 7.5% annually. Merton is up 10.1% to £659,305, while Lambeth is up 5.7% to £660,895.

Managing director of Your Move and Reeds Rains estate agents Oliver Blake said that the slower market should help ease the affordability challenge faced by many buyers.

He added: “Even in London, where an average increase was recorded over the month, homes in most boroughs are significantly cheaper in real terms than they were this time last year.”

 

Rightmove

The autumn market has stronger momentum in areas with better affordability and sentiment, with Wales, East Midlands, West Midlands and Yorkshire and the Humber all recording average annual price rises of at least 4%, Rightmove found.

After years of price falls in parts of London, there are signs of renewed buyer activity at the upper end, with a 6% rise in number of sales agreed for homes of £750,000 and over compared to same month last year.

Miles Shipside, Rightmove director and housing market analyst, said that buyer affordability has been increasingly stretched by seven years of national average property price rises outstripping buyers’ average wage inflation.

He added: “However in London, after asking prices rose by over 50% between 2011 and their peak in 2016, there have been two years of subsequent price falls in parts of the capital. Now there are signs that these price reductions in parts of London have led to an upturn in buyer activity as sentiment improves.”

The upturn in London’s buyer activity this month is in the upper end of the London market, above £750,000, comprising around a fifth of all transactions in London. The number of sales agreed above £750,000 is up by 6.0% on the same month a year ago, while below £750,000 it is down by 3.6%.

Average asking prices in Inner London peaked in February 2016 at £823,000 and are now £756,000, which has helped with the increase in buyer activity, Rightmove added.

It noted that autumn traditionally sees a boost in activity and this will be fuelled by more choice for buyers with a 16% jump in new properties coming to market in the first week of September compared to the average of the final three summer weeks.

Shipside added: “The start of the back to school season sees a surge of sellers coming to market compared to the preceding quieter holiday period. Sellers are not hanging back in coming forward to try and sell, and with average prices just 1.2% higher than a year ago, many seem to be pricing sensibly.”

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