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Property market picking up in England and Wales outside London

There are signs that the property market in England and Wales, excluding London, is picking up with average monthly prices up 2.8% in August to £269,685, the latest analysis report shows.

However, annual price growth remains almost static at 1.1%, the weakest performance since 2012, and annual transactions increased by just 0.7% to 795,437 and this was down to a 26.8% surge in quarterly sales, the LCP data also shows.

New build annual average prices increased by 5.6% to £309,737, a 16.2% premium over existing stock, while new build annual transactions continued to increase to 98,456, representing 12.5% of all sales.

‘As the absence of a resolution on Brexit begins to create stresses on the economy, the short term pick-up which has been seen may well be reversed,’ said Naomi Heaton, chief executive officer of LCP.

When it comes to the prime central London market, the data reveals that the average annual prices in August rose modestly by 1.1% year on year to £1,901,254, but month on month and quarter on quarter prices fell while annual transactions fell by 6.1% to 3,204, lower than during the global financial crisis.

New build average prices increased annually by 14.9% to £2,439,549 but they have fallen in the short term. In this sector annual transactions stand at just 345, a fall of 50.6% year on year.

‘The slide in transactions looks to be bottoming out. The annual fall is the lowest since 2014 and sales have surged 21% over the last quarter, reflecting a tangible increase in buyer interest,’ said Heaton.

‘This has not yet translated into price growth as buyers still expect significant discounts, even on marked down prices. Greater competition for limited stock may change this. Continuing Brexit shenanigans of course, may cause investors to retreat again but on the other hand, increasing global uncertainty appears to be reinvigorating the appeal of prime central London as an alternative asset class,’ he added.

In Greater London the market continues to rally. Average prices in August increased by 2.7% to £646,661, while year on year they increased by 2%, outperforming 2018 while the fall in annual transactions slowed to 2.5%, which now stand at 84,970 and quarterly transactions have surged by 37.4%.

New build prices now stand at £731,772, an annual increase of just 1.6%. New build transactions continued to plummet with an annual fall of 23.5% to 11,046.

‘It seems some buyers have tired of postponing their purchase decisions and believe current pricing and the weakness in sterling already create attractive market conditions. Nevertheless, as with prime central London, heightened uncertainty around the Brexit outcome on 31 October may cause buyers to sit back again and wait,’ Heaton pointed out.