Annual price growth falls in England to less than 1%
Annual price growth in the 12 months to July 2019 in England has slowed to just 0.7%, well below the year on year rise of 4.2% in Wales and 1.4% in Scotland, the latest national house price index shows.
Month on month prices have increased by 0.5% in England to £232,710, by 1% in Wales to £165,303 and by 0.7% in Scotland to £153,968, the data from the Land Registry shows.
But prices have fallen in some locations. They were down by 1% month on month in London and down 1.4% year on year to £477,813. And annual growth in England has halved compared with June.
On a regional basis Yorkshire and the Humber recorded the biggest monthly price rise of 3.2% while the North East saw the most significant monthly price fall of 2.1%. Yorkshire and the Humber also had the largest annual price rise of 1.9% and the North East the largest annual price fall of 2.9%.
The key going forward is whether the market will bounce back, according to Sam Mitchell, chief executive officer of Housesimple. He pointed out that there is traditionally a 20% increase in property listings in the autumn.
‘Brexit appears to be the main factor behind the larger decline. While Brexit uncertainty may put some people off moving, life does not wait for politics to calm down and neither should sellers. If you need more space or are in the market for your first or dream home, mortgage rates remain very competitive and less competition in the marketplace could work in your favour,’ he said.
Jonathan Hopper, managing director of Garrington Property Finders, pointed out that overall the annual pace of price growth has halved in the space of just a month, which he described as a reminder of buyers’ acute price sensitivity.
‘Buyer confidence has ebbed and flowed due to Brexit but this sharp fall in price inflation is the starkest sign yet that buyers are reassessing what they are willing to pay. Transaction levels continue to wane, with the supply of homes for sale being increasingly limited to those sellers who have an urgent need to sell,’ he said.
‘While the shortage of stock had formerly propped up prices, fragile confidence is now chipping into any inflationary benefit tight supply might have brought. Price falls have now spread from the capital to southern England as a whole,’ he explained.
‘The sheer size of the market in London and the commuter counties has acted as a deadweight on the English market as a whole where price growth is now barely in growth territory,’ he added.
Although these figures relate to a few months ago rather than what is happening now, according to Jeremy Leaf, north London estate agent and a former RICS residential chairman, what is interesting is that they confirm no great changes are happening in the market one way or the other.
‘Prices are slowly increasing, as we might have expected. However, there is confirmation of what we are seeing on the High Street that there has been some recovery in the property market in London. Rather than being the worst performing area, it is starting slowly to regain some of its attraction as buyers and sellers look beyond Brexit and try to get on with their lives,’ he said.