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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.
This time last year, the table above was negative – but not to the expectation of any of the real doom mongers! The highest fall shown was Nationwide with prices 5.3% below what they were in 2022. Just one year on, with rates still at 5% versus 5.25% last year, Nationwide are showing prices can still rise at this level of base rates – so far by 2.4% year on year.
The table above shows that price wise you can see they are pretty similar, but mostly up just slightly. This clearly shows how incredibly resistant property prices are currently to base rate fluctuations, which, in the past, have caused serious downturns in the market. This is partly due to the fact that most people who own, don’t have a mortgage, but also due to those being on a mortgage taking out long term fixed for 2-5 years.
The other ‘saviour’ which appears to have delivered less volatile property prices is the fact that FTBs since 2014 have to be assessed at average long term interest rate levels and lenders are restricted to how much they can lend at 4.5 times income.
Finally, one economic factor that has helped both the rental market and buying and selling is the consistent growth of wages which has helped to fuel rents, while helping support people affording higher mortgage rates.
Overall, the rapid climb in base rates, may have curbed inflation, but it hasn’t done the damage some forecast to the housing market – so far!
We are a bit low on ‘country’ news this month as there aren’t any detailed reports out at the moment. However, as we are in ‘conference season’ politically, what’s incredible is that despite the different housing policies for each ‘country’ the reality is that property prices over time grow pretty much at the same rate – 3 to 4%.
Although they do vary dramatically at a local level, the impact on property prices and transactions seems to mainly be economic. So a local area that’s doing well, such as London, Edinburgh, Belfast or Cardiff are typically seeing good growth. That’s because the economy tends to be stronger in ‘capital’ cities, people tend to earn higher wages and, of course, supply is more restricted.
Compare this to less well-off areas such as Aberdeen and Nottingham, then these areas tend to struggle more from a property price performance perspective – both are down year on year and prices in the long term don’t tend to keep up with inflation.
Country performance data from the Halifax:
Halifax
“Scotland saw a more modest rise in house prices, where a typical property now costs £205,144, +1.7% more than the year before.
“House prices in Wales also recorded strong growth, up +5.5%, compared to the previous year, with properties now costing an average of £224,433.
“Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by +9.8% on an annual basis in August. The average price of a property in Northern Ireland is now £201,043.”
As the market is starting to improve, the number of regions that are seeing prices going up has increased and the number seeing property prices going down has also increased, notably with home.co.uk, Halifax and UK HPI all showing every region up or staying the same.
Of the regions still in negative growth, they are incredibly small, and I expect by the end of the year, these will all be up. While some indices are showing the East Midlands is still down, the amount is almost insignificant as it’s -0.2% or -0.1%.
As a result, the main regions struggling to see growth are the ones that have the toughest affordability: South West and South East, as well as the East, although London seems to be bucking the trend with small growth year on year. This is likely to be due to the severe lack of stock and wealth in the region.
For regional performance by indices - download the full version of the September 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.
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 and Oxford, 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:
Comparing long term changes to what’s happening today, some of the ‘top performers’ over time, while Belfast is one of the top performers today according to the Land Registry, long term, prices haven’t kept up with inflation.
In contrast, of our lower performers, Brighton and Hove is struggling just now, but long term it’s beaten inflation, meanwhile Aberdeen hasn’t performed long term, nor is it doing well at the moment.
Topping the price growth charts according to Land Registry and Hometrack:-
Lowest performers are:
Good reports on stock levels and demand, with both up, suggesting we’ll get a good run of property sales through the Autumn which will help everyone survive the slower November and December months.
Zoopla’s chart shows how good supply is and this in itself will bring more people to the market as they see more choice and more properties that they would like to buy, all this helps to energise the property sales.
It also means that with more supply as well as demand, it’s less likely that prices will be fuelled too much out of people’s reach and, if we see some more falls in the base rate between now and Christmas, this will help to get people out and about for 2025 and hopefully see us returning to a more ‘normal’ market.
Here’s a summary of the latest supply and demand data from each of the indices:
Zoopla
Market activity stronger than last year
“All key measures of sales market activity are higher than 2023 supported by economic growth and rising consumer confidence.
“Buyer demand for homes is a fifth higher than this time last year. New sales agreed are almost a quarter higher, building on the increased momentum in sales from earlier in the year as mortgage rates fall to an average of c4.5% for a 5-year fixed rate at 75% LTV. Sellers continue to bring homes to market at an above-average rate. Many of these sellers are also buyers, which explains why sales agreed continue to increase.
“More new supply means the stock of homes for sale continues to increase and now stands at a 7-year high of 33 homes per agent, giving buyers ever more choice. More supply will keep headline price inflation in check over 2024 and into 2025. Serious sellers must price realistically to agree a sale within a reasonable time.”
No material impact from August base rate cut
“The long-awaited cut in the base rate in August was welcome news for the wider economy and consumer sentiment, but it has had no material impact on levels of buyer demand compared to the underlying trend over recent weeks. The real reason buyer demand for homes is 20% higher than last year is down to a fall in demand over summer 2023 in response to the spike in mortgage rates.
“However, our data did register a modest increase in new sales agreed in the days following the base rate reduction as wary buyers waited for a rate cut to agree a sale. The good news is that there is sufficient buyer demand to support rising sales volumes. Sales agreed up 23% is a truer reflection of the health of the sales market which remains on track for 10% more sales than 2023.”
Rightmove
“Since the Bank Rate cut on the 1st of August, the number of potential buyers contacting estate agents to view homes for sale is 19% higher than in the same period a year ago. This comparison is with a very subdued period in 2023, when the market was dealing with the fallout of unexpectedly high inflation figures and peak mortgage interest rates. However, this improvement in the buyer demand trend from +11% across the month of July shows the immediate and strong impact of the first Bank Rate cut since 2020. Agents report that increased political certainty and the improving economic outlook is also helping with buyer interest.”
Latest transaction data from Chris Watkin and TwentyEA
This latest data shows that both listings and sales are doing extremely well versus the years prior to the pandemic, matching the more ‘normal’ year of 2018:
What are the current hottest and coldest postcodes?
At a more local level, The Advisory shows, by postcode which postcodes are hot and cold. For example, in GU18 (Lightwater), 76% of the properties on the market are under offer, in contrast, L2 (Liverpool) being the worst performers according to this index, with only 7% of properties on the market under offer. Lightwater, Bristol, Sheffield and Stockport are reported as having some of the busiest markets, while Liverpool, London and Birmingham have some of the slower ones.
Source: TheAdvisory
To find out what the Propcast market is reporting about your local postcode visit: House Selling Weather Forecast here.
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