Asking prices up just 0.4% in the UK in January and year on year
Asking prices in the UK increased by just 0.4% in January, the lowest monthly rise for this time of the year since the beginning of 2012, the latest index shows.
They are also just 0.4% higher than a year ago, taking the average to £298,734, with the national average being dragged down by new sellers, particularly in the South, realising they have less pricing power in the current market.
The index from property portal Rightmove also shows that supply is broadly similar to a year ago with the number of properties coming onto the market in the first two weeks of 2019 down 2.1% with movers in the North more active.
Scotland has seen the strongest market on an annual basis with asking prices up by 5.9% year on year to an average of £147,328, and also up 0.1% month on month. The next strongest market was Yorkshire and the Humber, up 5.3% year on year and 1.4% month on month to £189,545.
In contrast, asking prices in the South East fell by 1.8% year on year to £390,119 but increased marginally by 0.2% month on month. In Greater London they fell by 1.2% on an annual basis and 1.5% on a monthly basis to £593,972.
Asking prices in Wales are up 4.3% year on year but month on month they are down by 1.9% to £188,224, and there is also a mixed outlook in the East Midlands with asking prices up 3.9% year on year but down 0.3% month on month to £221,834.
Miles Shipside, Rightmove director and housing market analyst, revealed that agents are now reporting that activity is now picking up, but the picture varies on a regional basis. ‘Given the current market backdrop and ongoing political turmoil, it’s not surprising that the more challenging conditions in London and its nearby regions mean that they appear to have had a slower start to the year,’ he said.
‘Overall however, with Rightmove visits up by 5% on 2018 and at record levels for this time of year, it is encouraging that potential home-movers are still searching in vast numbers. Traditionally this is the time of year when more movers look at a wider choice of fresh property supply and kick-start the market, and this year’s buyers have the added spur of the slowest rate of new year price increases for five years,’ he added.
He pointed out that both London and the South East have a strong influence on national average prices since together they constitute 30% of all new to the market listings, despite their home owners currently being among the most reluctant to come to market.
While the national average of properties coming to the market is broadly unchanged, there was a 10% drop in London, while the largest rises in supply are predominantly in the Northern regions.
‘Broadly speaking, buyer affordability and sentiment are in more positive territory in the North than in the South. But wherever you are looking to buy, mortgage rates are still at historically very cheap levels and lenders are competing hard to lend,’ Shipside explained.
‘In addition, sellers seem to recognise that they need to lower their price aspirations. Mass market home movers have a track record of ignoring the politics and continuing to satisfy their housing needs, and as long as these fundamentals remain in place through this period of uncertainty, the market will keep moving. Indeed, in 2018 the number of sales agreed by estate agents was down by only 3% on 2017, an indicator of resilience and holding up much better than many had forecast,’ he added.
According to David Plumtree, Connells Group Estate Agency chief executive, there is a shortage of buyers despite more stock, and this is more pronounced in London and the East. ‘Brexit concerns are, of course, the cause for hesitancy amongst buyers and we don’t expect any change in this until we see some certainty,’ he said.
‘There remains a good deal of price reduction activity on unsold stock in order to stimulate interest from buyers and we expect to see very modest growth in average house prices in 2019,’ he added.
Will Watson, director of Watsons Residential in Nottinghamshire, also believes Brexit will have an impact on the first few months of the year. ‘The market seems to be relatively healthy for first time buyers, at least up to the £200,000 mark. Anywhere past £250,000 and it’s getting more challenging, with lower activity,’ he said.
‘I think with Brexit, there will continue to be caution and uncertainty in the market until we get an outcome either way. Once we know where we stand it should start to alleviate that caution and stimulate growth in the upper end of the market,’ he added.
