UK property market heading for a slow end to 2018

In the final months of the year the housing market can speed up, with buyers looking to complete sales in time for Christmas, but it would appear that this is not happening this year.

Today’s figures from Rightmove show that asking prices in Britain have fallen by 1.7% this month, the largest November drop since 2012, and asking prices are now 0.2% below a year ago, the first annual fall for seven years.

All regions recorded a monthly price fall, with the largest falls in the South and the upper end of the market with wealthier commuter towns around London, where prices have risen by over 40% since 2011, seeing significant price falls.

This isn’t a sudden trend. Indeed, last week another asking price index report from Home.co.uk showed that price cutting is widespread in the housing markets in England and Wales as they adapt to reduced demand and increasing supply.

Figures are suggesting that the property downturn that began in London is now affecting other parts of the country such as the South East and the East of England, and also Yorkshire and Humberside.

This comes against a background of slowing annual price growth which is confirmed by the latest official figures published by the Office for National Statistics (ONS) showing that over the past two years, there has been a slowdown in house price growth, driven mainly by a slowdown in the South and East of England.

The figures also shows that prices fell by 0.3% over the year in London but this was up from a fall of 0.6% in the year to August 2018 while on a non-seasonally adjusted basis, average house prices in the UK were unchanged between August and September.

But Scotland appears to be bucking the trend. House prices in Scotland increased by 5.1% in the 12 months to September and by 1.9% month on month, the figures from the latest Your Move index show.

It means that Scotland is outperforming England and Wales where prices fell by 0.1% over the same 12 month period. Inverclyde saw annual growth of 12.2%, Argyll and Bute was up 12% and in Edinburgh prices not only increased by 9.6% year on year but also by 6.6% month on month.

It would seem that estate agents and sellers in England and Wales are reacting to market forces and lowering their price expectations by more and sooner than the usual January slowdown.

There is also the continued uncertainty about Brexit as the March 2019 deadline approaches and the political machinations at Westminster regarding a leadership challenge on the Prime Minister and the European Union making it clear it is not willing to change anything in the draft leaving deal are not helping.

When it comes to making big decisions likes moving home, only those who really need to do so are in the market, or so it would appear. Yet this is not happening in Scotland. North of the border there is the same lack of stock but prices are rising. The housing market is strong while largely inactive, an interesting scenario and one to keep an eye on.

Ray Clancy
Editor Property Wire

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