House prices in England and Wales increased by 1.8% year on year in August with every region seeing annual growth, but month on month the housing markets are more vulnerable.
The latest figures from the Your Move index also show that sales activity is sluggish and transactions in 2018 so fat are at their lowest level for five years. It also shows that the average price is now £303,199, up £5,300 on the previous year.
A breakdown of the index figures reveals that month on month prices were up overall by just 0.1%, but it is enough to put an end to consistent falls seen every month since March.
By contrast, annual growth remains steady, up from a 1.7% annual increase in May, but a fall from 3.8% in January and 4.5% last August. The index report also points out that the 1.8% increase is significantly below inflation of 2.3%, meaning real terms falls. However, every region continues to show nominal increases in annual prices.
But it also points out that the real terms fall in prices in many regions is likely to help first time buyers, and many expect these to be the dominant buyers in the market this year.
Outside London, the top regions for growth remained unchanged in with prices in the West Midlands up 2.9% annually, the East Midlands up 2.7% and the North East up 2.6%. However, growth rates in the first two slowed, while they remained unchanged in the North East, but all three continued to report increases above inflation.
But month on month the index shows the market is more sluggish with prices down in all but three areas. Prices were unchanged compared with July in the North East, were up by 0.7% in Greater London and by 0.8% in Wales.
But prices fell by 0.7% in the West Midlands on a monthly basis, by 0.6% in the East Midlands, by 0.5% in Yorkshire and Humberside and the South East, by 0.3% in the South West and by 0.1% in the North West and the East of England.
The index report also shows that while London started the year recording the biggest monthly fall in prices since the financial crisis, acting as a significant drag on the market, now prices are up 3.6% in the year to July at £625,040.
Within Greater London Redbridge saw prices rise 6.5% annually to £477,196, Kensington and Chelsea by 7.5% to £1,834,640, Merton up 10.1% to £659,305 and Lambeth up 5.7% to £660,895.
More areas have seen prices drop, however, with prices falling in 21 out of 33 boroughs in London. The biggest fall was in Westminster with a decrease of 11.8% annually, largely a result of its failure to repeat the significant number of registrations of new build flats that boosted prices last year.
‘The slower market should help ease the affordability challenge faced by many buyers. Even in London, where an average increase was recorded over the month, homes in most boroughs are significantly cheaper in real terms than they were this time last year,’ said Oliver Blake, managing director of Your Move and Reeds Rains estate agents.
