Asking price growth rockets ahead in the Midlands of the UK
Average asking property prices in England and Wales increased by 1.3% or £3,877 this month, the same rise as a year ago when there was a rush to beat the introduction of extra stamp duty on additional homes.
The data from Rightmove for March 2017 is a sign that the housing market is resilient in the UK despite economic and political uncertainty due to the decision of the country to leave the European Union.
With the formal leave process due to take place when the Prime Minister triggers Article 50 before the end of the month, it looks as if the property market is not having any jitters going into the beginning of the official Brexit negotiations.
The 1.3% monthly rise takes the average asking price for a home to £310,108 but annual growth has slowed, down to 2.3% compared to 7.6% in March 2016. But the March 2017 monthly rise has only been exceeded once at this time of year since 2007.
In Greater London asking prices increased by 1.4% to £649,772 and were up by 0.9% year on year. This has been driven in the main by increases in Outer London where the average asking was up 2.6% in contrast to a smaller 0.4% uplift in Inner London.
But the data also shows that it is the Midlands that is leading the price growth with both the East and West Midlands seeing record highs. Asking prices increased month on month by 2.1% in the East Midlands, surpassing an average of £200,000 for the first time while the West Midlands saw a month on month rise of 2.1% and an annual rise of 4.2%.
Wales was the only place to see asking prices fall with a 2.5% decline month on month to an average of £173,073, and down 0.6% compared to a year ago. The East of England, which has seen strong growth, saw prices up just 0.8% month on month.
According to Miles Shipside, Rightmove director and housing market analyst, there is a change in the market with the tradition of the market often being driven by southern half of the country.
He explained that the figures indicate a certain resilience in the market. ‘Since the start of the decade, the average March price rise has been 0.9%, so this month’s 1.3% uplift is an indicator of a shortage of suitable property for sale in many parts of the country, with strong demand for the right property at the right price,’ he said.
‘Since 2007we’ve only once seen a larger rise than this in March and we are also keeping pace with last year’s rise, which had the added momentum of investors looking to beat the stamp duty tax deadline of 01 April,’ he added.
But he pointed out that while market fundamentals remain robust, the annual rate of increase in the price that new to the market sellers are asking for their property remains modest at 2.3% for the second consecutive month. ‘The prices set by house sellers and their estate agents are a leading indicator of market sentiment, and these figures demonstrate the slower pace of increases,’ said Shipside.
He believes that many buyers are being forced to be price sensitive, so sellers have to be wary of over pricing if they want to sell, especially in the South where the pace is no longer being set by the more affluent commuter belt, including London with its international appeal.
According to Russell Quirk, chief executive of eMoov, the seasonal pick up ahead of what is traditionally the busiest time of the year for the housing market along with an ongoing shortage of supply is keeping prices up.
‘We’ve seen a lot of hesitation in the market of late, particularly in the South East where people are worried about maximising their investment return. The reality is that in areas like the Midlands where prices aren’t as inflated, a more no nonsense approach is benefitting home owners as they proceed with their sale and see stronger, more natural price growth across the board as a result,’ he added.