publication date: Jun 12, 2014
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
What's happening with property prices this month?
My monthly property price summary looks at what all the main property price indices are reporting during the month. The indices range from Rightmove which only records asking prices through to Land Registry which is ‘sold property price’s but only tells us what has happened in the past.
What are the main headlines?
It’s not wise to read too much into the following headlines as they tend to be written to secure PR in the news, so can sometimes be ‘over exaggerated’. I tend to read ‘between the lines’ so here’s my summary of the report headlines.
Download June’s property price summary
Kate Faulkner comments on Report Headlines:
“It amazes me how much people are getting ‘over excited’ about the house price growth we are seeing. Savills’ research has already shown that the property price rises we are experiencing is very similar to what happened after the last crash. And the growth has now been proved not to be due to Help to Buy. What everyone is missing is from 2007-2012 half the number of people who would normally buy, didn’t. They are now rushing in, sellers aren’t. That’s 2.5 million extra buyers cramming purchases into a year or two rather than spread over seven years. If politicians and the industry don’t get the causes of property prices right in the first place, then the efforts to calm them will fail. We need to concentrate more on understanding market dynamics than panicking about them, otherwise policies will ‘hamper’ a ‘normal’ market reaction post a five year slump.”
Actual report headlines
Rightmove “Largest ever May rise as new sellers ask nearly £10k more.”
NAEA “Buyer numbers soar as supply remains low.”
Hometrack “Hometrack housing survey indicates start of a slowdown in house price growth.”
RICS “Demand supply imbalance continues to push prices higher.”
Nationwide “Annual house price growth edges up in May.”
Halifax “House prices in the latest three months (March 2014-May 2014) were 2.0% higher than in the preceding three months (December 2013-February 2014).”
Land Registry “The April data shows a monthly price change of 1.5 per cent.”
It’s always interesting to know what’s happening to the ‘national average’ but it’s no use to you and I if we are buying, selling or investing, we need local prices, at least at a regional level, so here is my summary of the regional property prices across the different indices.
Download June’s property price summary
Kate Faulkner comments on Regional Price Differences:
“The Hometrack data seems to be the one correctly picking up the impact of the pent up demand potentially waning following poor buyer numbers from 2007-2012. Other price indices are still just reporting London prices going up, everywhere else is yet to catch up with property price ‘normal’ growth. What’s important to be aware of with these numbers, is Q1 14 versus Q1 13 is a rising market versus what was a pretty static one. As the year progresses, reports will compare Q2’s 14 rising market with the rising market from Q2 13, so it’s quite possible the large growth figures we have seen so far will narrow. The media are likely to report this as a ‘crash coming’, so buyers will hold off, which is likely to stem the tide of growing house prices we’ve seen so far. It’s to what extent this happens which will be of interest and to see if it’s short or long term.”
Summary of the regional reports from June’s different indices
Rightmove “The disparity between London and the other regions is further highlighted by the growth in new seller asking prices so far in 2014. The average asking price in London is up by nearly £80,000 so far in 2014, an average of £4,405 per week. The weekly average of the rest of the country is £1,521. (May 2014)”
Home.co.uk “Home prices rose in all English regions, Scotland and Wales over the last month. Monthly price rises were strongest in the South East (2.0%) and the South West (1.5%) outside of London (2.4%), whilst Wales and the East Midlands registered only marginal gains. (May 14)”
Hometrack “House price inflation is starting to moderate both in London and nationally. The proportion of postcode districts with price increases slipped from 50% to 42% of market in May. This led to a slowdown in overall house price growth, with prices increasing by 0.5% in May, compared to 0.6% growth in both April and March. (May 14)”
RICS “While prices are now rising across all regions, East Anglia and the South East are reported to have experienced the broadest rises over the last 3 months. (April 14)”
Nationwide “Evidence suggests that higher priced areas have been seeing the largest percentage increases in house prices, especially in London and the South East, but the majority of Help to Buy loans have been on transactions where the property values are below the national average. For example, 45% of Help to Buy mortgage guarantee loans were for property costing £125,000 or less, while only 22% of all mortgage house purchase transactions were on property values below this threshold. (May 14)”
Land Registry “The region with the largest annual price increase is London rising by 17 per cent. North East saw the lowest annual price growth with a movement of 2.9 per cent. London also saw the greatest monthly price rise with a movement of 4.2 per cent. North East experienced the only monthly price fall of 1.9 per cent. (April 14)”
Download June's Property Price Summary
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