Are house prices going up, down or sideways? What’s the mood in the market? Here’s what the latest reports on the property market suggest.
Overall, it would appear a price slump in London and South East is disguising a reasonably strong market in some areas further from the capital but it’s largely a fragmented picture.
The view from Halifax and Nationwide
Halifax, the UK’s biggest mortgage lender, was quite upbeat in its July report, saying that prices hit a new record high, rising strongly over the month by 1.4%.
On an annual basis, it suggests the average price of a home reached £230,280, up 3.3% on the year, which is higher than the consensus analyst forecast of 2.6%.
The managing director of Halifax, Russell Galley, believes that an improving financial situation for consumers is a significant factor in supporting the market, saying “Pressures on household finances are easing as growth in average earnings continues to rise at a faster rate than consumer prices”.
Figures from Nationwide building society showed similar modest growth in many parts of the country outside of London.
Rightmove and Land Registry more subdued
The closely watched report from online property search engine Rightmove indicates the market is a little more subdued however. Rightmove’s stats show annual price growth slowing to 1.4% in July, down from 1.7% the previous month.
The highly respected Land Registry report, which uses actual sold prices rather than asking prices like Rightmove, recently published figures showing an annual average rise of 3%.
However, it reported a monthly increase of only 0.1%, perhaps suggesting the market is softening more quickly than the Nationwide or Halifax stats suggest.
Huge regional variations
Yet while London and some parts of the South appear to be in a slump, prices in some parts of the UK are powering ahead, Rightmove’s figures show.
In the West Midlands and Scotland, areas where prices have previously struggled, there has been strong growth and sales activity. Prices rose 8.5% over the year in Scotland and up 1.5% in July alone, while in the West Midlands the increase was 5.6% on an annual basis.
Houses took only just over 30 days to sell on average in Scotland and 46 days in the West Midlands.
London market continues to slump
By contrast, the market in London, South-East and East of the UK is in a depressed state.
Asking prices dropped 1.7% on the year in London, falling by 0.5% in July alone. The biggest falls were seen in central London, Zone 1, with prices down 6.5% over the year and by 1.2% on the month.
Huge price differential
Of course, there is still a huge gulf in prices between London and much of the rest of the country.
The average London asking price is now £628,458, according to Rightmove, which is almost three-times the £227,804, seen in the Midlands and four-times the £158,864 in Scotland.
Prices slowing fast, but little sign of crash… yet
According to the Land Registry, the average price of a property across the whole country is now £226,531 but prices are rising at the lowest rate since August 2013.
Land Registry’s experts believe there’s little fear of much in the way of further larger falls, however, let alone a price crash, with the number of transactions and mortgage approvals up month-on-month.
It also reports positive expectations for further price rises in the long-term.
London price falls to ripple out?
Rightmove suggests the London slump has further to go, with it deepening over the traditionally slower summer months.
Past history of the housing market suggests that where London goes, the rest of the country follows. For first-time buyers this would be a boon, and could actually be healthy for the rest of the economy longer-term.
…. Or is it different this time?
However, perhaps it will be different this time and the ‘ripple-effect’ from London might not occur. The Mortgage Advice Bureau (MAB) certainly seems to think so, calling the market ‘resilient’.
Head of Lending at MAB, Brian Murphy gives what is perhaps a fair summary of the current situation, saying “Growth, whilst modest in some parts, is still evident due to buyer demand and confidence in bricks and mortar would appear to be, for many consumers at least, unruffled by ongoing political debate”.
As an online insurance company, Policy Expert help our customers to compare insurance products and find a policy that’s right for them. Customer care is at the heart of everything we do and we have a dedicated customer service team on hand by phone, email, twitter and instant chat. For more more information speak to one of our experts on 0330 0600 600 or email firstname.lastname@example.org