Forecast based on agreed sales prices predicts 9% growth from May to August
House prices in the UK are set to grow this summer, increasing by 9% between May and August 2019, according to a new analysis of agreed sales prices.
The first house price forecast report from Reallymoving predicts that while average prices fell steadily between January and April due to Brexit uncertainty, the effect on consumer confidence is likely to ease.
The firm used data on prices agreed using its home buyer records to provide what it describes as an ‘accurate three month property price forecast’ as movers typically look for home moving services 12 weeks before moving.
Historically, Reallymoving’s data has closely tracked the Land Registry’s price paid data, published retrospectively and it says that despite a slow start to the year, the spring market showed a good deal of resilience.
It says that prices agreed during the past few weeks forecast to deliver a surge in average values of 6% between May and June 2019, followed by a further 3% increase in August.
The market is following a similar pattern to spring/summer 2018, when the Land Registry recorded price rises of 4.4% between May and August 2018, but this year, greater pent up demand and growing impatience with the Brexit process has resulted in a more pronounced increase in house prices during the summer period.
Annually, prices have been consistently lower than the previous year between January and May 2019. A notable annual drop in values in May 2019 of 6%, it says, is further evidence that this year the spring market has accelerated later than in 2018, as the traditionally busy spring sales window was delayed by Brexit uncertainty.
However, an increase in market activity later in the spring means annual price changes are forecast to stabilise, with 1% growth expected in June, followed by no change in July and 1% in August 2019.
‘Prices agreed this spring will show in Land Registry data in the summer, yet our customers registering for home move services as soon as their deal is agreed are giving us unique insight into what lies ahead for the housing market,’ said Rob Houghton, chief executive officer of Reallymoving.
‘Our forecasts suggest that sellers are growing tired of the wait and see approach and once the Brexit deadline passed at the end of March, with no further clarification, sellers decided to press ahead with their move,’ he explained.
‘This new buyer demand and a continued shortage of quality housing stock is on course to drive strong price growth between May and August, with particular surges in regions benefiting from strong demand such as the North East and the South West, where affordability remains attractive and wages are rising,’ he pointed out.
‘Annually, average UK prices have been falling since the start of the year but in June we can expect prices to see a return to positive growth. This suggests that a strong market performance over the spring will see prices make up the value lost in the first part of 2019 and are set to recover to 2018 levels this summer. There is considerable pent up demand in the market following three years of uncertainty and with many doubting that Brexit will be resolved any time soon, people are increasingly making the decision to move on regardless,’ he added.