The property market is on track for an upturn in house sale prices this summer, with a 9% surge in average prices in the three months between May and August, reallymoving has predicted in its House Price Forecast.
As homebuyers register for quotes for homemove services on the site typically 12 weeks before their purchase completes, providing data on the purchase price agreed, reallymoving said it can provide an accurate three-month property price forecast before those deals complete three months later.
Rob Houghton, chief executive of reallymoving, said: “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.
“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.
“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.
“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 with a rise of 1% year-on-year, followed by 0% change in July.
“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.”
Historically, reallymoving’s data has closely tracked the Land Registry’s Price Paid data, published retrospectively.
Average UK property prices fell steadily between January and April 2019 as Brexit uncertainty gripped the market, held-back consumer confidence and curtailed transaction levels.
But despite a slow start, the spring market has shown a good deal of resilience, with 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, the report said 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 of 6% in value in May showed 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.
Of the 12 regions of the UK analysed, 11 are forecast to see prices rise during the three months to August, with the strongest gains in the North East (20%), the East of England and the South West (12%).
The capital is no exception and although growth is more subdued than in other parts of the country, London is still forecast to see prices rise by 3% over the summer period.
Meanwhile, Scotland is the only region of the UK expected to see property price falls, with a 3% drop anticipated between May and August.
In the South West prices have been fairly flat since the start of the year but are on course for a 8% increase in June, followed by a further 4% rise in August, as a burst in market activity in the spring translates to summer completions.