Let's assess UK property prices as the cold starts to bite

publication date: Oct 13, 2014
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

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Kate's property price summary for October 2014 including the Halifax and Natiowide indices


Each month I take a look at the various property price indicies in order to see what they are reporting about the state of the housing market in the UK. We look at the indices from big companies in the property and finance world such as Halifax and Nationwide.


Sometimes the headlines can be misleading or hard to interpret as they may well be written to gain the attention of media outlets. I like to dig a little deeper into the stories and provide you with my summary.


Download my full property price summary for October


Kate Faulkner comments on Report Headlines:After 18 months of a massive surge in buyers in 2013, although properties in many areas remain well below 2007 heights, both real and nominal property prices are still appearing to slow down, even in Kensington and Chelsea. Good news for buyers. I do disagree with the NAEA comments about “thirty-somethings dominate the FTB market as ‘the young’ are priced out”. At my age, 30 IS young... reality is though, FTBs average age has been 29 years for some time, so with a six year recession, when it wasn’t right for many to buy, more buyers in their 30s should be expected, so the conclusion this is due to affordability doesn’t, in my view, match what’s actually happening.”


Actual Report Headlines:-

Rightmove “Autumn upturn starts earlier than usual with 0.9% rise.”

Home.co.uk “London prices finally slide as the market cools.”

NAEA “Thirty-somethings dominate first time buyer market as young remain priced out.”

Hometrack “Zero house price growth’ recorded in September for first time in 19 months, according to latest Hometrack National Housing Survey.”

RICS “Price momentum firm but demand moderates further.”

Nationwide “Annual house price growth slows in September.”

Halifax “House prices in the latest three months (July-September 2014) were 2.7% higher than in the previous three months (April-June 2014).”

Agency Express “UK property market bounces back after summer slow down.”

Acadata “House prices up just 2% a year since crisis.”

Land Registry “The August data shows a monthly price change of 1 per cent.”


Download my full property price summary for October


It is important to look at the way house prices vary in the different regions of the UK, overall average prices can only tell part of the story as they are going to be vary different in London compared to Burnley. Below I take a look at what the indices are saying about regional price variations.


Kate Faulkner comments on Regional Price Differences “Many commentators are saying the Land Registry data contradicts ‘other reports’ which say the market is slowing. Of course the Land Registry is some months behind more lead indicator surveys, so this isn’t true. What’s worrying from the current slowdown is looking at prices in the Midlands, for example, prices are still 11% below the peak of 2007. If prices don’t continue to move forward, this potentially causes asset value issues for buy to let investors who piled into the area from 2005-7 and of course prevents second steppers from moving on. We need to watch the trends carefully over the next few months as if prices do slow down across the country, we could be looking at a new era of low price growth, especially if the Bank of England uses its new powers to successfully curb lending. What we don’t know though is can the Bank of England hold back house prices through lending restrictions in a sector where 50% of homes in England are now owned without a mortgage. Very interesting times!”


Here's what the inidices are saying about regional price differences 

Home.co.uk “Certain regional property markets continue to be strong performers: East Anglia, the East Midlands, the South East and South West all show 6-month price rises of over 4%. Others, however, are showing much weaker price growth; home prices in the North East are still falling behind inflation, rising only 1.2% over the last six months and by only 0.6% over the last year. (Sept 14)”

Hometrack “London was the only region to record a price fall in September - of just -0.1% – with further modest price falls likely in the months ahead. The proportion of postcode districts showing price increases over September has fallen to a third of last month’s figure. However, the proportion of postcode districts with a price decrease over the month has bounced back to 1.2% (from 4.2% in July). (Sept 14)”

Acadata “For six regions of the UK, average property prices achieved on completion are yet to match their pre-crisis score – and a North/South divide in the field remains evident in the race back from the debris of the financial crash. The North has the furthest ground to travel, with average prices still 8.3% (or £13,400) below their housing boom high in March 2008. Average house prices on sales completion in the South West set a new record in August, surpassing their October 2007 peak for the first time. This makes it the fourth region after London, the South East and East Anglia to scramble out from under the shadow of the financial crisis. Areas further afield like Warwickshire, Northamptonshire, and York are breaking cover too, with prices also towering to new heights.

Overall, the capital has seen the strongest housing market recovery, with prices having now grown 47.3% from their previous peak in February 2008. However, the rate of annual house price inflation in the capital eased off by 0.1% in August, as we see growth relaxing into a slower tempo from the heady pulse earlier this year. (Sept 14)”

Land Registry “The region with the most significant annual price increase is London with a movement of 21.6 per cent. North East saw the lowest annual price growth with a movement of 3.0 per cent. London also experienced the greatest monthly price rise with a movement of 2.7 per cent. Both South West and North West saw the smallest monthly change with a movement of 0.1 per cent. (Aug 14)”


Download my full summary for October 2014


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