The asking price of property coming to the market has hit a new national record with a monthly increase of 0.8% (+£2,343) pushing the average up to £308,075. Seven out of 11 regions have hit new price records this month. However, different markets are still operating at different speeds, and the overall picture is one of a less buoyant market both in terms of price growth and number of sales agreed.
Miles Shipside, Rightmove director and housing market analyst comments: “After six years of continual year-on-year price growth the current market is becoming increasingly price-sensitive, with new-to-the-market sellers being limited to an average asking price growth of just 1.1% over the last year. This is in spite of there being plenty of historically cheap mortgage products around for buyers who meet lenders’ criteria. Sellers need to pitch their price at a tempting level to entice buyers, as while there are signs of strong demand there appears to be hesitation among some buyers to commit.”
Lack of stock on the market means that agents in some areas report that the right property at the right price is still selling briskly. Indeed Rightmove has seen record visits in the first four months of the year showing that interest in property remains robust. Annual rates of asking price growth in excess of 4% are still to be found in the East Midlands (+4.8%), the West Midlands (+4.3%) and Wales (+4.3%). All other regions also remain positive year-on-year except London at -0.2% and the South East at -0.1%.
Shipside adds: “The last time the South East recorded an annual price fall was in 2011, indicating that the softening in the London market is now spreading to its commuter belt, while there are signs that Inner London may be closer to a price recovery. While this gives buyers in the South East the opportunity to negotiate prices down, in some of the more buoyant areas of the country the options to do so are more limited by a shortage of suitable properties on the market.”
Some London and commuter belt markets are in a period of price and activity readjustment. The number of sales being agreed by estate agents so far in 2018 compared to the same period a year ago has fallen most in the South East (-8.5%), the East of England (-7.8%), and Greater London (-6.9%). Nationally sales agreed numbers are down by 5.4%.
Shipside observes: “One of the goals of the Mortgage Market Review four years ago was to stop markets over-heating or becoming unstable. The combination of the restrictions on what buyers can borrow brought in by the Financial Conduct Authority and stretched buyer affordability are having their desired effect and are limiting price growth with a knock-on effect to sales agreed numbers. So while the current lending environment has its downsides, it is there to guard against painful boom and bust scenarios. People still need and desire homes, but need their wage rises to outstrip house prices. This has started to happen, but needs to carry on for a sustained period.”
To find the value of your home visit our online valuation tool