Asking prices in the UK continue to rise but in most regions on a monthly basis but year on year prices are down and expected to be more or less stagnant in the year ahead.
In England and Wales asking prices were up 0.6% month on month but the annual rate fell to 2.6% while in Scotland prices were up 0.2% month on month and 1.6% year on year, according to the latest Home.co.uk index.
The latest growth took the average asking price to £300,187 in England and Wales, £177,459 in Scotland and £541,618 in Greater London where asking prices were up 0.6% month on month but down 1.5% year on year.
Asking prices rose in all regions month on month and year on year apart from Greater London. The strongest month on month rise was in Yorkshire and Humber with growth of 1.2% which the index report suggests is due to a rise in buy to let investment from landlords. Year on year asking prices were up 2.8% in the region.
In Wales asking prices increased by 0.3% month on month and by 1% year on year to an average of £185,225.
Some regions continue to see asking prices well above where they were a year ago, most notably the East of England where they are up 9.6% year on year, the South West up 4.2% and the East Midlands up 5.4%.
The index report also shows that the supply of property entering the UK market has dropped again, down by 6% year on year, however, supply has increased further in the East and South East by 4% and 5% respectively compared to March 2016.
According to Doug Shephard, director of Home.co.uk, stagflation in the UK property market looks highly likely this year. ‘Whilst this month’s price rises indicate a typical seasonal lift, the overall trend towards lower year on year price growth continues. Rising inflation due to a weaker post Brexit pound means that capital values overall are not rising at all in real terms,’ he said.
‘However, there is significant growth in several regions over and above the rate of inflation. Vendor confidence remains high in certain regions and is most apparent in the East of England, East Midlands, North West and South West,’ he explained.
‘Whilst the slowdown persists in London and the South East, brought on by oversupply and overly high prices, it is these more outlying regions that are lending the greatest support to the national housing market figures. But the pace of the price increases seems unsustainable in view of affordability constraints and comparatively low rental yields,’ he pointed out.
‘However, as we approach the end of the first quarter of 2017 with a continually declining year on year price trend, UK property looks fated to endure a year of stagflation at best. In March 2016 the annualised rate of increase of home prices was 7.9% yet today the same measure is a mere 2.6%,’ he added.
