Asking prices rise across most of England and Wales

Ryan Fowler

October 19, 2016

House prices

Asking prices in England and Wales increased by 0.9% or £2,623 this month, taking the average price of a home to £309,122, the latest Rightmove index has shown.

Following jitters after the vote to leave the European Union prices have bounced back and are no just 0.4% below the all-time high recorded by the index in June. Year on year asking prices are up 4.2%.

The data also shows that sales agreed in September have recovered from a summer lull and are now down 4% on a year ago when they increased strongly after the general election and are up 6% on 2014.

Knight Frank: Expected subdued prices in 2017

But the south west and the north east have both seen asking prices fall month-on-month with declines of 0.8% and 1.8% respectively. Prices are up in all other regions, led by a month on month rise of 2.4% in Greater London, followed by growth of 1% in the east of England, and they are up 0.8% in the north west, up 0.6% in Wales, 0.5% in Yorkshire and Humber and in the east Midlands, up 0.2% in the south east and up 0.1% in the west Midlands.

The Rightmove index report points out that it is currently a sellers’ market in the north of the country with sales agreed up on 2015 and available stock down but buyers still have upper hand in the south where sales agreed are recovering but down on 2015, and stock is up.

Miles Shipside, Rightmove director and housing market analyst, said: “After the referendum result and the usual summer slowdown, estate agents’ experiences appear to fall into one of two camps, with a definite north/south divide. Agents in the northern half of the country reported a quiet week or two after the surprise result of the Brexit vote, but most then saw a quick return to good levels of buyer enquiries and subsequent sales agreed.

“In contrast many in the southern regions saw more prolonged hesitancy among buyers, with it taking until September before a marked pick-up in activity. What has continued is the overall upwards trajectory in the average price of property coming to market, underpinned by years of inadequate new-build supply.

“After some price falls over the quieter summer period, the national average is now less than a couple of thousand pounds shy of its all-time high recorded in June.”

He also pointed out that given that the housing market in the second half of 2015 was buoyed by the surprise of a majority government, overall sales activity seems to be recovering well after an especially quiet summer in some southern parts of the country.

Shipside added: “An element of this was due to transaction levels being front loaded into first half of this year due to the tax inspired buy to let surge. Sellers’ market in the northern regions saw an 11% fall in the total available stock for sale compared to the same period in 2015, continuing the downward trend over the last few years.

“This reduction in choice for buyers hampers their ability to negotiate and gives sellers the confidence to both ask for higher prices and hold out for their asking price. The number of sales agreed have risen by 3% in these regions compared to the same period a year ago.

“While the number of new to the market sellers is actually up compared to this time last year in all the northern regions, it is failing to keep pace with high buyer demand. Agents report brisk sales in many areas, especially in the mass-market sectors. They say as long as it’s not over priced, the right house in the right area is quickly being snapped up for close to, at, or even over the asking price.”

The report reveals that buyers hold the upper hand in much of the south. September’s figures for the four southern regions of Greater London, the south east, the east of England and the south west saw total available stock for sale rise by 16% compared to the same period in 2015.

While sales have picked up after the summer months, the number of sales agreed is down across all four southern regions, indicative of less buyer activity than in September 2015. The average across all four regions is a fall in sales agreed of 10%.

“This increase in the number of properties up for sale should not be misinterpreted as a glut of unsold property, but rather as an increase from the very low number of properties that agents have had on their books in the last few fast selling years. While there is still underlying high demand in mass market sectors, some find that affordability has become over stretched while others judge that prices have risen beyond their true value.

“While many properties are still selling, in market sectors where there is now a lot more choice, buyers need enticing by an attractive price or by properties with special finish or appeal. If sellers fail to take this into account, then buyers will choose to buy elsewhere or bide their time.”

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