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Property Price Summary
Property Price Summary June 2013
Is the housing market really heating up, or will it cool over the summer?
We track most of the monthly reports on property prices produced on a monthly basis. This report summarises what’s being said about the market and includes Kate Faulkner’s comments on what this means primarily for the general public, but also for the industry, market and economy.
Rightmove “Rightmove doubles 2013 forecast from 2% to 4% as ‘aggregation of marginal gains’ fuels
4.8% annual growth”
Home.co.uk “Home prices hit 5-year high”
Hometrack “House prices post another strong increase in June” Nationwide
“Pick up in house price growth continued in June” Halifax
“House prices continue to rise steadily”
RICS “Confidence building”
Acadametrics “House prices hit record high in June, but it is London driving the increase?”
Land Registry “The May data shows a monthly price change of 0.1 per cent”
Kate Faulkner comments on Report Headlines:
“These headlines all look amazing until you get to the last two which record what has ‘actually’ happened to sales prices! The asking prices for property reported by Rightmove and Home clearly show sellers are buying into the idea of rising prices by putting their properties on at higher prices than before. This rise in sellers’ advertised prices is turning into real growth in the housing market prices, from an offer, mortgage and surveyor’s perspective. However, when it comes to actual sold prices, they have yet to show the same growth. This is partly due to timing. Sold price trends are typically a few months behind the current market, so we will need the data over the summer to see if higher sellers’ expectations are translating into higher prices paid at a national level. ”
Regional Property Price Differences
Rightmove “There will be significant underlying regional variations with some areas, primarily in the North, struggling to stay in positive territory for the year. London will continue to outperform the rest of the country and we also expect the South East, the main beneficiary of the ‘over- spill’ from the capital, to maintain its strong momentum, both driven by an on-going shortage of supply of property for sale. Asking prices in the capital are currently 29% higher than they were five years ago compared with 7% in the South East and just 5%
Home.co.uk “The regional picture remains very diverse. London asking prices continue to soar at more than twice the rate of any other region. Asking price growth is now being recorded across most areas of the UK, although the Northern regions, Wales and Scotland continue to exhibit the poorest performance. The worst performer over the last 12 months is the North West which experienced an asking price fall of 0.2%. (June)”
Hometrack “Improved market activity and price rises are spreading beyond London. Prices grew in six out of ten regions in June with London posting a well above average increase of 0.9%, the same level seen in May. East Anglia registered a 0.4% increase while prices in the South East grew
0.3%. The four areas where prices were unchanged were the North West, North East, Yorkshire & Humberside and Wales. (June)”
RICS “There has been a major turnaround at the regional level, with surveyors in seven out of ten regions in England and Wales recording rising prices, and in nine out of ten expecting prices to increase in the near term. However, the market is still very biased in favour of London and the South East, where price momentum is strong. Expectations over the medium and long term, particularly in London, have reached quite elevated levels. (June)”
Acadametrics “This month the LSL/Acadametrics Index has once again reached a new peak price, which indicates a general recovery in the housing market from its low point in April 2009. However, a large part of this recovery has occurred because of upward price movements in the Central London areas, with other parts of the UK still seeing little or no price movements since 2009. We appear to be witnessing a two-speed recovery with London and the South East in overdrive, while other areas such as Wales remain in neutral. We can see that if the Greater London price rises are taken out of the index, the rate of annual growth of house price inflation falls from 2.5% (including Greater London) to 0.8% (excluding Greater London). Without London, the index has been positive, but only just, for at least the last twelve months. Recovery – what recovery? (June)”
Land Registry “The region with the most significant annual price increase is London with a movement of 5.0 per cent. The region with the greatest annual price fall is Yorkshire & The Humber with a movement of -2.2 per cent. The East Midlands saw the greatest monthly price rise with a movement of 2.0 per cent. The East saw the most significant monthly price fall with a movement of -0.7 per cent. (May)”
Kate Faulkner comments on Regional Price Differences:
“The LSL/Acadametrics index says it all “Recovery – what recovery?”. Sure, London is doing well as are parts of the South East and East Anglia. However, the rest of the country’s property market, in the main, is still stable to falling. This reinforces the need for care to be taken when reporting any recovery. What these vast market differences do mean is there has never been a better time for local agents to work with their local media and community to make sure buyers and sellers understand what is actually happening in their area versus what’s the media are saying!”
Demand for Property
Rightmove “Rightmove’s lead indicators show increases in enquiries, new sellers and marketing prices.
An important milestone for a broader-based and sustainable recovery is that all regions of the country now have higher asking prices than a year ago firmly on the record. (July)”
Hometrack “The momentum in house price growth over the first half of the year has been driven by a widening imbalance between supply and demand. The gap stabilised in June with slower growth in demand (up 1.6%). A seasonal slowdown in demand is to be expected as we approach the summer. (June)”
RICS “The pickup in buyer demand since the beginning of the year has been marked, with the new buyer enquires balance rising further to +38, the highest level since August 2009. (June)”
Land Registry “In the months December 2012 to March 2013, sales volumes averaged 48,875 transactions per month. This is a decrease from the same period a year earlier, when sales volumes averaged 53,387 per month. Over the past 36 months transaction volumes have been relatively consistent. (May)”
NAEA “The number of homes sold increased on April’s figures, as did the number of house hunters looking to purchase a home. Despite this positive news, members did record a decrease in the number of FTBs buying. The average number of house hunters had also increased, up by an impressive 14 per cent compared to last year’s figures – from an average of 274 per branch in May 2012 to 313 in May 2013. The same figure also saw a month-on-month improvement, from an average of 310 in April to 313 in May. Meanwhile, the average numbers of FTBs have dropped from 23 per cent in April to 20 per cent in May, which suggests that despite improving lending conditions, access to finance is still proving difficult for those looking to get on the property ladder for the first time. (May)”
CML “Lending to first-time buyers, home movers and remortgagors all increased in May, with a particularly marked increase in lending to first-time buyers. The number of mortgages to first-time buyers in May reached 25,100 – 29% higher than in April, and 42% higher than in May last year. First-time buyers accounted for 45% of all loans for house purchase, similar to the levels of the past few months but considerably higher than the 38% seen on average since 2007. (May)”
Kate Faulkner comments on Demand for Property:
“Demand for property is being boosted by better value mortgages and all the general ‘good cheer’ buyers and sellers are hearing. The two most useful reports are from Rightmove and Hometrack. Rightmove suggest new sellers, who have been lacking are coming onto the market, while Hometrack says demand is slipping back slightly. This is the real test the market will have over the coming months. Will the higher demand continue or was this boost to the housing market over the last few months just a flurry of activity in fear of prices starting to rise? Will the supply then increase on the back of reports of higher prices and then the extra supply slow property price growth and transactions for the rest of the year? ”
Supply of Property
Rightmove “The front of the housing market pipeline is showing more activity with new seller numbers up 5% this month compared with July 2012. (July)”
Home.co.uk “The current market conditions will continue to boost the confidence of active vendors and those considering placing their property on the market. Supply-demand balance continues to work in their favour across many areas of the country. The current total volume of sales stock across the country is 12.4% less than in July last year. Moreover, sellers are being tougher on pricing as evidenced by a sharp fall in the number of price reductions (down 17% year-on- year). (June)”
Hometrack “An on-going shortage of housing for sale remains a key feature of the market and an important driver of price increases. Two factors are behind the shortage in supply. First, is an increase in the number of first time buyers who increase demand but add nothing to available supply. Secondly, existing occupiers are looking to identify property they want to buy before putting their homes on the market which boosts demand ahead of any growth in supply. (June)”
Nationwide “There are few signs that the supply of housing is improving significantly. Indeed,
construction data point to a further decline in building activity in recent quarters from already depressed levels. For example, in Q1 2013 housing completions in England were down 8% compared to the same period of 2012 and around 40% below the average number of
quarterly completions in 2007. (June)”
RICS “Although rising demand has enticed more homeowners to test the market, this has to date been quite modest, with the new instructions balance positive but actually falling back in June from +15 to +12. The combination of strengthening demand and a relatively light flow of stock coming onto the market is resulting in generally tighter market conditions. Indeed, the sales-to-stock ratio is much higher than six or twelve months ago, although it did edge down marginally this month. (June)”
NAEA “The average number of properties available for sale per branch decreased from 61 in April to
60 in May. The supply of housing has withdrawn slightly from April’s figures. The small decrease could be put down to properties being snapped up by eager buyers. (May)”
Acadametrics “The lack of supply is helping to boost prices but in the process making it more difficult for first-time buyers. The market needs an increase in supply to ensure prices don’t rise out of equilibrium. (June)”
Kate Faulkner comments on Supply of Property:
“There is definitely an indication more sellers might be coming onto the market – but as Hometrack says, they will need to find a home to move to before they risk putting their home on the market, so supply is bound to lag behind demand. From a new build perspective, news from builders suggests supply will increase, but this will take a few months more to register on any statistics. If not being done already, now is the time for agents to check properties which were left previously unsold to see if they can build stock by enticing potential sellers back into the market, especially ones aimed at First Time Buyers. From a buyer’s perspective, a few notes through doors of properties you like might be well received – as long as you are prepared to buy at a fair price.”
What to do next?
Don’t carry out a property project, especially buying and selling without taking independent, up to date, advice. On average 30% of property sales fall through after offers are accepted – this can cost you thousands of pounds, let alone the stress of losing a property you wanted to buy.
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Copyright of Kate Faulkner 2013-2015 Dated: 15.07.2013
Kate carries out over 50 speaking engagements every year, highlighting property market issues to the industry and
consumers. She has written six property books including four for Which?, is a featured property expert on the
4Homes website, regularly presents market issues for BBC Radio Nottingham and has a column in the Nottingham
Evening Post and is currently the Telegraph’s property club Q&A person.
She has appeared on BBC Breakfast News, Daybreak, ‘Your Money’, Radio 4’s You and Yours, Radio 5 Live, ITV/ITN News and The Big Questions.
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