Asking prices in England and Wales fell in June by 0.4%, the first decline since June 2009, and annual growth was down to 1.8%, according to the latest index data.
Both the month on month and year on year fall was bigger than perhaps expected, down from growth of 1.2% and 3% respectively in May 2017, the figures from property portal Rightmove shows.
The month on month fall in asking prices was led by the South East and the West Midlands. They fell by 2.4% in Greater London, by 0.9% in the South East and by 0.8% in the West Midlands.
Elsewhere the month on month rises were small, for example, just 0.6% in the East of England which has been a region topping the growth tables only recently, and by 0.7% in the North West and 0.8% in Wales.
The data also shows that year on year prices were down by 1.4% in Greater London and by 0.5% in Wales. Annual price growth is still robust in the East Midlands at 5.1%, the East of England at 3.8% and the West Midlands at 3.7%.
Political and economic uncertainty is finally making a mark on the housing market, according to Miles Shipside, Rightmove director and housing market analyst. ‘It now seems certain that we will have continuing political uncertainty, which the housing market traditionally dislikes, and with the first fall in June prices for eight years there is no doubt that the lack of stability is a factor,’ he said.
‘The price of property coming to the market had increased in June in every year since 2009, so buyer confidence has clearly been affected by inflation outstripping their pay packets and current political events,’ he pointed out.
However, he also pointed out that demand is still high and the figures show that the number of sales agreed compared to a year ago is up by 7%, but markedly more at 11% in the Northern regions than in the South.
‘The high levels of sales being agreed show that the underlying fundamentals are largely unchanged with high first time buyer demand which drives movement higher up the ladder, all aided by the cheap cost of borrowing,’ Shipside explained.
But first time buyers are paying more for a home while others are not. The Rightmove data shows that asking prices for typical first time buyer properties are 3.5% higher month on month and 5.5% higher than a year ago. Second steppers, in contrast, are paying less. Typical moving on property asking prices are down 0.8% month on month but still up 2.7% year on year.
Shipside said it is clear that housing markets performing at different speeds and levels depending upon geography and sector and the national average figures conceal large differences between different local markets and property sectors, which appear to be reacting in widely variant reactions to the country’s overall air of uncertainty.
The typical first time buyer sector with two bedrooms and fewer is now the fastest growing sector. ‘Those at the traditional starter level are brushing aside uncertainty, with demand being fuelled by the ongoing desire for home ownership, Government assistance, and mortgage repayments often being cheaper than rent for a similar property,’ Shipside explained.
He also pointed out that London and its commuter belt are proving to be a drag on the national figures, but are currently counter balanced by continuing momentum in other parts of the country. ‘Markets traditionally slow in the second half of the year, and with a slowing in the pace of asking price rises and the forthcoming months of political and economic confusion, the usual slower market in the second half of the year seems to be one of the few certainties in 2017,’ he said.
‘Having said that, the historic under supply of the right property at the right price and ongoing strong housing demand are evidenced by buyer enquiries to agents picking up to a degree after the surprise election result. They were 3% higher on the Monday after the election than the Monday before, showing that people are getting on with addressing their housing needs,’ he added.
