Dwindling Stock in the North Create Record Prices

This month’s Rightmove House Price Index reports a new record in asking prices of newly marketed property for the third consecutive month as steady monthly increases continue with a 0.4% (+£1,364) rise. The Spring market concludes with stronger number of sales agreed overall in May, just 2.0% down on May 2017 and up 5.4% on May 2016.Rightmove go on to report how current market conditions are varying significantly between the north and south. Strong buyer activity in northern regions has shrunk available stock levels by an average of 4.3% when compared to a year ago, restricting buyer choice and giving sellers the power to try higher prices.
However, in contrast the less active southern regions all have more stock available for sale, up by an average of 17.5% compared with a year ago, a driver for a buyers’ market and a downward pressure on asking prices.

The June Halifax House Price Report is showing a 1.9% annual change in house prices, up +1.5% monthly and to an average UK house price of £224,439.

Russell Galley, Managing Director, Halifax, said:

“House prices grew by 1.5% on a monthly basis, in contrast to a decline seen in April. The month on month figures are more volatile than the quarterly or annual measures. In the three months to May house prices were 0.2% higher than the previous quarter and on an annual basis they are 1.9% higher. Both of these measures have fallen since reaching a recent peak, in the final months of last year.

“These latest price changes reflect a relatively subdued UK housing market. After a sharp rise in January, mortgage approvals have softened in the past three months, whilst both newly agreed sales and new buyer enquiries are showing signs of stabilisation having fallen in recent months.

The continuing strength of the labour market is supporting house prices. In the three months to March the number of full-time employees increased by 202,000, the biggest rise in three years. We are also seeing pay growth edging up and consumer price inflation falling, and as a result the squeeze on real earnings has started to ease. With interest rates still very low we see mortgage affordability at very manageable levels providing a further underpinning to prices.”

You can read the reports above in full at https://www.halifax.co.uk/media-centre/house-price-index/ and https://www.rightmove.co.uk/news/house-price-index/

Calmez are providers of property development funding through mezzanine, bridge and stretch facilities to experienced builders and developers. For more information please contact us here or on 0207 096 1900.