Asking prices in England and Wales were at a virtual standstill in July, up by just 0.1%
and falling or flat in seven out of 10 regions, the latest index figures show.
The price being asked for properties put on the market fell in the North East by 1.3% month on month to £150,012 but still up 1.6% year on year, in the Yorkshire and Humber by 1% to £181,856 but up 4.1% compared to a year ago, and by 0.7% in the North West to £186,999 although still up 2.4% on an annual basis.
The data from property portal Rightmove also show that asking prices fell in the East of England by 0.7% to £348,855 and are 3.8% higher than a year ago, and fell by 0.4% in the East Midlands to £207,378 but are up 4.9% year on year.
Prices were flat in the South West at £312,678 where they are 3.9% higher than July 2016 and were flat in the South East at an average of £422,981 but are still 2.4% above a year ago.
Asking prices increased by 1.1% in Greater London to an average of £641,388 and are 0.9% up year on year, increased by 0.7% in the West Midlands to £218,468 and up 6.1% year on year, and were up 0.6% in Wales at £185,382 and are 2.5% higher year on year.
The Rightmove report also says sales have remain strong in the 12 months to July 2017, almost identical to 2016 and prospective buyers in many parts of the country are seeing the highest proportion of properties marked as sold than at any time in the last seven years.
It points out that even with 7.6% more sellers coming to market in July compared to this time last year, buyer choice is restricted as supply fails to keep pace with strong sales and buyer demand.
Miles Shipside, Rightmove director and housing market analyst believes that stretched buyer affordability is acting as a price brake with national prices up on average by a modest 2.8%, with buyers very price sensitive and some properties hitting their price ceiling.
‘Sellers coming to market at this time of year have to price more keenly as the traditionally bubblier spring selling season is over and prospective buyers are distracted by their own summer holiday plans,’ he said.
‘A year on from the shock referendum result and subsequent dent in activity levels, the fundamentals remain strong. Low unemployment, low interest rates, strong demand and historic undersupply of homes are mitigating any wobbles in confidence and as a result nearly half the properties on the market, over 45%, have sold,’ he explained.
‘Compared to the period around the referendum a year ago, more sellers have come to market and more buyers are buying. The number of sales agreed is up by 4.6% in June 2017 compared to June 2016, and the number of sellers coming to market is also up on the same period a year ago, with a 7.6% increase in fresh choice,’ he pointed out.
‘The half way point of 2017 is a useful time to make a comparison with the previous year and the number of sales being agreed by agents is uncannily within fractions of a percent of the number at the same half way point of last year. This year and last year have had their own shocks and distortions, but these statistics show that the distractions have been short-lived and have now evened themselves out,’ he added.
But he also pointed out that the market, particularly in the north of England, remains very price sensitive as some properties are hitting their price ceiling. ‘Buyers, many of whom are sellers too, will struggle to afford to pay much more. Wage growth is muted, there are signs that consumer credit is tightening, and at some point there will be the first rise in mortgage interest rates for a decade or more which will come as a shock to buyers who have either forgotten or have never experienced interest rates going up as well as down,’ said Shipside.
‘We can see now that price rises are muted despite high housing demand, indicating we have left the stage of the cycle where price rises exceed the rate of inflation. High demand will continue to underpin prices, but we are seeing stretched affordability limiting the pace of rises, especially in the south of the country,’ he concluded.
