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Summary of property price and market indices
City/town property price tracking
Demand, supply and transactions
This report is to help give everyone – industry and consumers – a quick five-minute guide to what’s happening in the property market, according to the property indices, along with property expert Kate Faulkner’s comments.
Interesting looking at today’s average prices. Although they have hardly moved for the last few months, property prices have recovered from the small falls we have seen over the last 18 months to their 2022/23 highs.
With mortgage rates set to fall over the coming months in line with the last rate cut and more forecasted, it’s likely that we have seen the ‘worst’ of the price falls. And, what happens next after a ‘lull’ in the market is pent up demand will mean there are many who will be keen to purchase, assured that price falls are now off the table.
Bank Rate information from Nationwide’s report:
The other good news is that according to Zoopla, housing market activity is running above pre-pandemic levels:
Another good guide to property price performance is Zoopla’s latest data on asking versus agreed prices. During a downturn, the margin tends to widen and narrow when prices are on the rise and people are competing to purchase a property.
During the height of the market in 2021, the price offered versus asking were pretty similar – around 100%, while they fell to 95/96% during the mortgage rate crisis.
What this tells us is that although we will always get ‘boom and bust’ in the economy and in the property market, it does appear that market falls are getting smaller versus the 20% falls we’ve seen in past recessions. Equally though, price rises are getting smaller too. Although there was a spike in prices during the pandemic, over time, prices on average, have only kept up with inflation increases since 2005.
Country wise, it’s a similar story to the national picture, according to Land Registry data – although bear in mind this lags the current market by some months. Overall, price rises remain steady and slightly below the long term average.
What’s more interesting is the local analysis from the e.surv on Scotland and The Principality for Wales. According to e.surv, “At a local authority level, the market saw increases in 15 areas” while in Wales “some local authorities saw decreases, such as Merthyr Tydfil, average prices in Bridgend exceeded £250,000 to hit a new peak.”
For Scotland, Wales, and Northern Ireland we monitor:
Local expertise for each country though is essential when looking at how the property market is performing. This is especially the case in the likes of Scotland and Wales where areas are as diverse as the English Regions.
Summary from the indices of the Scottish housing market
Halifax
“Scotland saw a rise in house prices, a typical property now costs £205,264, +2.1% more than the year before.”
e.surv
Record high house prices for third month in a row
“Scotland’s residential property market gives us further cause for optimism this month as average home prices increased in May for the third month in a row. The market has remained remarkably resilient in recent years given the challenges it has faced but this month’s gain of nearly £600 (0.3%), represents the strongest performance for two years. This is a hat trick of record new house prices over the past three months.
“Our data shows that Scotland’s average house price is now well in excess of £225,000 and comfortably above its earlier peak in September 2023. Clearly, Scotland is enjoying an earlier and stronger revival than across most of England and Wales.
“At a local authority level, the market saw increases in 15 areas, and, with the onset of a new government, we expect market sentiment will further improve. The new government has already said it is supportive of the existing mortgage guarantee scheme which has been used to good effect in Scotland. Confidence will likely be further buoyed as the Bank of England begins to cut its base rate in the coming months.”
Summary from the indices of the Welsh housing market
Principality Building Society
Average house price in Wales rises after five quarters of consecutive decline
“The second quarter of 2024 has brought much-needed positive news to the Welsh housing market. After five consecutive quarters of declining house prices, we are now seeing a recovery.
“The average price of a home sold in Wales rose to £236,369 in the second quarter of 2024, rising 3.1.% but still -2.4% below the year-earlier level and still 5% below its peak of £249,000 at the end of 2022. Meanwhile, a majority of local authorities reported higher prices in Q2 for the first time since 2022, resulting in the most positive market conditions for two years.
“While some local authorities saw decreases, such as Merthyr Tydfil, average prices in Bridgend exceeded £250,000 to hit a new peak.”
Halifax
“In Wales, house prices grew +3.4% to £221,102 – the highest price seen since October 2022.”
Summary from the indices of the Northern Ireland housing market
Halifax
“Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by +5.8% on an annual basis in July, up from +4.1% the previous month and the highest increase since February 2023. The average price of a property in Northern Ireland is now £195,681.”
Regionally, we are seeing a stronger picture this month than last, with most regions showing positive property growth – although Zoopla and Nationwide reports still show it’s a mixed picture out there.
The top growth year on year from the different indices show the highest rise was recorded in the North East by Home.co.uk while the biggest fall was recorded by Nationwide, -1.8% in the East of England.
For regional performance by indices - download the full version of the August 2024 report here
At city level, we have two main sources of data: Hometrack which is around six weeks into the home buying and selling process and the Land Registry data which is anything from a few months to six months or more out of date.
There continues to be no ‘pattern’ to the rises and falls in the property market, it’s all dependent now on the local economy, wage growth and stock levels – as well as the property type – detached, semi, terraced or flat.
Topping the price growth charts according to Land Registry and Hometrack:-
Lowest performers are:
Out of the 30 cities we track via the Land Registry, since 2005, property prices have only risen above the average annual 3.8% inflation rate in five cities/towns. These include:
With the exception of Edinburgh, where prices have risen at the same rate as inflation over time, the remaining towns and cities we track actually show that property prices, in many areas, have risen at less than inflation.
The following towns and cities price growth ‘on average’ are performing below inflation:
For individual cities/towns' performance - download the full version of the August 2024 report here
Supply and demand seem to be settling down a bit more, with an increase in properties coming to market and an increase in buyer demand, which is likely to continue if mortgage rates continue to fall. Although the market isn’t expected to get back to the average 1.2 million transactions until 2025/6.
Here’s a summary of the latest supply and demand data from each of the indices:
Zoopla
Supply of homes for sale continues to grow
“One important feature of the housing market at present is that there are more homes for sale than at any point in the last six years. This is improving choice for home buyers and supporting more sales.
“The average agent has 33 homes for sale, 16% higher than a year ago and above the longer run average of 25.
“More supply means more sellers, most of whom are also buyers, motivated to move by a range of reasons. Many would-be movers are upsizers who are looking further afield to get the home and features they are looking for, while also seeking value for money.”
Sales agreed up 16% year-on-year
“A greater supply of homes for sale and more buyers has resulted in the number of sales being agreed is 16% higher than a year ago. A long-run index of weekly sales shows how sales in the first half of 2024 have been stronger than in 2023 and the pre-pandemic years.
“This is positive and reveals a more balanced housing market with sales volumes increasing but with greater stability in price inflation. Sales are up across all regions and countries of the UK.”
Rightmove
“The number of sales being agreed is now an encouraging 15% above the same period a year ago, when we were approaching the peak of mortgage rates. This compares to last month’s figure which was +6% above last year. This positive sales figure emphasises that serious home-hunters have been largely undeterred by the General Election and have been getting on with their moves. Similarly, the number of new sellers coming to market in the last four weeks is a steady 3% above last year, indicating that despite the uncertainty of an election, the vast majority of movers haven’t been put off.”
Latest transaction data from Chris Watkin and TwentyEA
The beauty of this data is that it is much more up to date than other indices, so reflects the current market more accurately. As you can see from the charts, listings are actually the highest they have been since 2017, while net sales are seeing similar high performance, albeit lower than the pandemic peak in 2021.
Overall, sales and buyers are in a good place over the coming months, especially if wages keep rising above inflation and mortgage rates keep falling.
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