Asking prices in England and Wales fell overall by 0.3% in August and average price growth is now 1.1% year on year, well below the rate of inflation, new figures show.
The largest monthly falls were in London and the South East, both down 0.6% with rising supply affecting the markets, according to the latest house price report from Home.co.uk.
The firm says that supply changes continue to indicate a worsening market for vendors. The total stock of properties on the market in England and Wales continues to rise, up 10.3% year on year to its highest level since November 2014 and the biggest supply increase was in the South West, up 15%
Regional markets in the North and West continue to indicate significant growth with Welsh prices up 5.9% and up 5.8% in the West Midlands year on year while month on month prices have risen in only the North West, West Midlands and in Scotland.
The research also shows that the typical time on the market for England and Wales has risen to 84 days, the same as in August 2017 and it has increased by 10% in London, by 9% in the South East and by 14% in the East of England.
The report points out that rising supply has led to market saturation in the East of England, and it looks set to join London and the South East in negative year on year growth before the end of the year.
The same pattern of supply-induced slowdown combined with a pullback in demand is now affecting the East Midlands and the South West, and this is exerting downward pressure on prices.
The West Midlands and the North West look like the next regions to be similarly affected as the negative sentiment that originally emanated from London and later the South East spreads north and west. Consequently, overall annual house price growth is trending to zero and stock levels are trending up.
‘The fact that London and the South East suffered the largest price falls over the last month serves to show that their woes are far from over. Asking prices in London have been slowly falling for 26 months and, thus far, the only solace is that the latest figures suggest that perhaps supply has stopped rising,’ the report says.
‘Meanwhile, the northern regional property markets continue to perform strongly as does Wales, which is leading the price growth tables ahead of the West Midlands. These regions, several years later in the cycle than London, are still showing significant market activity and low or falling time on the market figures. Slowdowns appear imminent in the West Midlands and the North West,’ it adds.
