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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.
Rightmove
First-time buyers face record prices as sales recover
“The average price of property coming to market rises by just 0.2% this month, lower than the average of 1.2% at this time of year, as new sellers heed their agents’ advice to price cautiously and tempt Spring buyers. Despite the economic headwinds, first-time-buyer type properties hit a new record price of £224,963 this month.”
Home.co.uk
Firmly on the Road to Recovery
“Asking prices across England and Wales rose for a second consecutive month during March, by 0.2%, although the year-on-year growth slipped into the negative (-0.3%) for the first time since December 2019.”
RICS
Most indicators recover slightly from recent lows but sales market momentum remains weak
“National house price indicator still in negative territory although marginally less so than in prior months.”
Nationwide
House price growth shows signs of stabilisation in April
“While annual house price growth remained negative in April at -2.7%, there were tentative signs of a recovery with prices rising by 0.5% during the month (after taking account of seasonal effects). April’s monthly increase follows seven consecutive declines and leaves prices 4% below their August 2022 peak.”
Halifax
UK house prices dipped in April, but market is more stable
“After three consecutive months of growth, the average UK house price fell in April, down by
-0.3% or around £1,000 over the month. The rate of annual house price inflation also slowed further to +0.1%, from +1.6% in March, meaning average property prices are largely unchanged from this time last year.”
Zoopla
Are the worst of house price falls now behind us?
“Annual house price growth slows but the worst of the month-on-month price falls are now behind us.”
Download Kate Faulkner's latest property price and market report here
Key points from the property market indices this month are:
Rightmove
Home.co.uk
RICS
Nationwide and Halifax
Zoopla
Overall, the news for the property market is the best it’s been to date, and as a result, optimism is high, which is great news. However, I still think we need to be a little cautious as there are still a lot of people that need to re-mortgage and may realise that the new payments are tougher than they thought, and there will be others that will find it tough now to not only find the deposit but also afford the mortgage.
However, if lenders can begin to be far more innovative about supporting new buyers onto the ladder - such as the Skipton deposit free mortgage, then demand could hold up well this year and on-going. Although some are criticising this versus past issues 100% mortgages created, the details and caveats they have put in place seem sensible and as we have moved to repayment mortgages, getting on the ladder with no or lower rate deposits is a fantastic opportunity for those that can meet the criteria.
Let’s hope that more lenders follow suit to support existing tenants to get on the ladder and relieve some of the pressure the PRS is under.
Download Kate Faulkner's latest property price and market report here
Slowly but surely the Land Registry data is catching up with the reports from more timely indices eg the Nationwide. Double digit growth has pretty much disappeared now (bar NI), but the long term trend remains good, with England and Scotland showing property prices over time have increased in excess of inflation, while Wales is on a par and Northern Ireland is still underperforming having had quite the bubble back in the credit crunch.
As always though, what’s happening in ‘each country’ differs, depending on where people live, increasing the reason that all buyers and sellers need to chat with the local agents to find out what’s happening, rather than relying on ‘averages’.
Principality Building Society
House prices subdued in Wales
“The average price of a home in Wales has fallen from a record high of just over £249,000 in Q4 2022 to just over £245,000 in Q1 2023.
“Quarterly prices decreased by 1.6% in Q1 – the first dip since the Covid pandemic - and this dragged annual price growth down to 5%, around half the rate of three months earlier.
“Property prices overall are higher in 20 of the 22 local authority areas compared with a year earlier. However, there are now just six authorities reporting annual price increases of 10% or more. Merthyr Tydfil - a more affordable area – heads the annual increase table, with a gain of 20%. At the other end of the spectrum, Gwynedd and Anglesey reported annual falls in nominal terms, whilst several other authorities – Flintshire, Monmouthshire, and Swansea in particular - reported only very modest increases.
“Whilst significant variation of reported price changes continues, the overall quarterly pattern reflects a marked shift from strong price increases to one of price reversals, as well as a more subdued market. Consistent with bearish market conditions, in Q1 more local authorities (14) reported price falls than increases (8) – an exact mirror image of the situation in Q4 2022.”
e.surv
January’s downturn in prices continues into February
“The average house price in Scotland in February 2023 has increased by some £6,300 - or 3.0% - over the last twelve months. This annual rate of growth has decreased by -1.6% from January’s 4.6%, which is a slightly smaller fall than the -1.9% reduction seen in January.
“However, in February 2023, 23 of the 32 local authority areas in Scotland were still seeing their average prices rise above the levels of twelve months earlier, three fewer than in January. The nine areas where values fell over the year were, in descending order: Inverclyde (-8.7%), Orkney Islands (-3.0%); Fife (-2.9%), Aberdeen City (-2.1%), Na h-Eileanan Siar (-2.0%), Glasgow City (-1.2%), Angus (-1.2%), Scottish Borders (-0.4%) and Dundee City (-0.2%).
“The area with the highest annual increase in average house prices in both January and February 2023 was Clackmannanshire, up by 25.0% and 29.3% respectively over the two months. However, there were only 27 transactions in Clackmannanshire in February 2023, with a small number of transactions frequently being associated with volatile movements in average prices.
“On a weight-adjusted basis - which incorporates both the change in prices and the number of transactions involved - there were six local authority areas in February which accounted for 54% of the £6,300 increase in Scotland’s average house price over the year. The six areas in descending order of influence are: – Edinburgh (17%); Aberdeenshire (9%); South Lanarkshire (9%); North Lanarkshire (7%); East Renfrewshire (6%); and Clackmannanshire (6%).”
Download Kate Faulkner's latest property price and market report here
Some interesting reports on a regional basis from the indices, with Rightmove reporting zero change for London year on year, while Yorkshire and Humber asking prices are up 2.9%. Home.co.uk are showing falls in areas where affordability is tough, including the East, South East and London, but growth in our most affordable region - North East, at +4.4%. Nationwide is showing a slightly more pessimistic picture, with six out of our nine regions showing falls, albeit small ones, while the Midlands and South West are in positive territory.
So, a mixed picture regionally, but so far, no sign of the ‘Armageddon’ that some have predicted and in fact some areas are holding up extremely well.
Halifax
“There’s an increasingly mixed picture emerging for house prices across the UK. The four regions of southern England have seen average house prices fall over the last year, with the South East registering the largest dip (-0.6%, average house price of £387,469).
“Typically, it’s these regions (including Greater London, Eastern England and the South West) where buyers face the most expensive average property prices, and therefore the biggest impact of higher borrowing costs. London continues to have the costliest homes of anywhere in the country at an average of £538,409 (annual rate of growth now -0.2%).
“Elsewhere all other regions and nations across the UK saw the rate of annual property price inflation remain in positive territory during April. The West Midlands posted the strongest annual growth of +3.1% (average property price of £249,554). Northern Ireland (+2.7%, £186,846), Scotland (+2.2%, £201,489) and Wales (+1.0%, £216,559) have also seen average property prices increase year-on-year.”
Zoopla
Worst of the monthly house price falls now behind us
“Annual house price growth has slowed to +3% with prices continuing to register modest quarter-on-quarter price falls of up to -0.7% across all regions and countries of the UK. There are early signs that the level of monthly price reductions are now reducing and the main adjustment in pricing is behind us. Our UK index is likely to register low negative annual growth by the summer and end the year at -1%.
“Current annual growth ranges from +4.8% in Wales to +0.5% in London, less than a third of the levels recorded this time last year. At a localised level we are recording modest year-on-year price falls of up to -2.1% across 6 local authorities in inner London and Aberdeenshire. All other areas continue to register positive annual growth rates but at a much slower rate than a year ago as a modest repricing process continues to run its course.”
FTB affordability worsens most in southern England
“The impact of higher house prices on FTB affordability is not uniform and depends upon the level of house prices and how much they have changed over the last 3 years. FTBs have faced bigger price increases in southern regions more than northern regions. The chart below compares the income to buy for a 2 and 3-bed first-time buyer home in 2023 and 2020 revealing a wide disparity in affordability.
“In higher-value markets such as London and the South East, the income needed to buy a home has increased by up to £12,150 for 3-bed homes since 2020. The greatest increase in the income needed to buy a 2-bed home is £7,300 in the South-West and East of England. In lower value markets the increase has been more modest as the pricing of FTB homes is generally lower. It is no surprise that market activity is holding up better across the north of England, Wales and Scotland where housing is more affordable than southern England.”
Download Kate Faulkner's latest property price and market report here
For city/town tracking, we use Land Registry (government data) and Zoopla/Hometrack. The Land Registry data is useful because we can analyse how property prices have changed over time and this helps us to put today’s price information into context.
The Zoopla/Hometrack data is useful as they take into account the change in mix of property transactions during the pandemic to houses away from flats. This has meant the likes of the Land Registry and other indices have over exaggerated price increases year on year.
Overall, out of 30 cities, since 2005, property prices have risen above inflation in all bar three – Belfast, Aberdeen and Newcastle upon Tyne. Even with the price growth seen during the pandemic, what this shows is that, in real terms, especially for those that own outright the property they have isn’t necessarily delivering from an investment perspective.
Topping the price growth charts according to Land Registry and Hometrack:-
Lowest performers are:
As always, we continue to see a huge difference in property performance at an individual city level and indeed Hometrack and Land Registry are seeing different high and low performers, although this is possibly the best match we have seen to date this year.
Doing well, according to both indices include Nottingham, Peterborough and Birmingham, while suffering falls or very low growth, the only difference is Edinburgh - according to the Land Registry versus Belfast for Hometrack.
And the differences are pretty stark, with Hometrack reporting -2.2% falls for Aberdeen, through to a rise of 6.5% in Gloucester. Of those that are performing well, they are typically cities that have the best affordability, whereas the likes of London and Oxford are tougher now to afford with the impact of the mortgage rate rises.
Download Kate Faulkner's latest property price and market report here
Fantastic timely data from Chris Watkin and TwentyEA, showing that instructions so far this year are actually better than 2022, but certainly performing as well as pre the pandemic.