Asking prices rose by 0.4% across England and Wales over the last month, despite election uncertainty
Growth in the mix-adjusted average is being driven by price rises in the regions. As London prices slide, it is the North and South West and the Midlands that are thriving and supporting the national average figure. Significant price growth, over and above the rate of monetary inflation, is evident in only four English regions and not in Scotland or Wales.
The trend towards improved market conditions in the North continues, with considerable improvement in property marketing times. There, increased demand coupled with limited supply has pushed up prices significantly since last month. The North West is leading the charge with annualised growth of 3.7%, followed by Yorkshire (2.9%). The North East has yet to indicate significant year-on-year growth but marketing times are back down to 2008 levels and recovery looks set to follow.
The East of England continues to head the regional league table for price growth, followed by the East Midlands, the South West and the West Midlands. All show price growth over and above the rate of inflation and, with the exception of the East, marketing times are either the same or lower for all these regions compared to June 2016. As we predicted, marketing times are finally beginning to nudge up in the East of England as rising supply starts to overwhelm demand.
Overall, the national figures continue to reflect a stagflationary housing market. Whilst recent price rises in the regions indicate that there remains much confidence and momentum, the ‘drag effect’ of sliding prices in Greater London means the trend towards near-zero year-on-year price growth appears inevitable. Moreover, rapidly rising inflation due to a weaker post-Brexit pound means that, overall, capital values will not rise in real terms.
Looking forward towards the autumn and winter, we can expect significant price falls in London and the South East, and these will impact negatively on the national figures.
In June 2016 the annualised rate of increase of home prices was 6.8%; today the same measure is just 2.8%.