Asking prices record lowest monthly rise since October 2008
Asking prices in the UK recorded their lowest monthly rise since October 2008, up just 0.6% in October to £306,712 and are 0.2% below a year ago, the latest index shows.
There was a smaller than usual Autumn price bounce and the number of sellers coming to market was down by 13.5% compared to this time last year, as sluggish prices and imminence of Brexit deadline deter speculative sellers.
The Rightmove October index report also show that the number of sales agreed were virtually unchanged, down by 0.5%, on the same period a year ago and there is currently more chance of getting a sale through to completion, with data showing that the percentage of sales agreed that have fallen through so far this year is the lowest since 2015.
A breakdown of the figures show that in Scotland asking prices increased by 1.6% year on year and 0.7% month on month to £155,684 while in Wales they fell by 0.4% on a monthly basis to £199,696 but are 2.5% higher than a year ago.
In the North East, Yorkshire and Humber and the East Midlands prices fell on a monthly basis, down by 1.7%, 0.3% and 0.4% respectively, but grew year on year. In the North East they are up 0.7% annually to £150,610, in Yorkshire and Humber up 2% to £195,440 and in the East Midlands up 0.4% to £228,326.
The North West saw average asking prices rise by 1.3% month on month and 4% year on year to £201,321 while in the South West the market was also positive, with asking prices up 0.1% on a monthly basis and up 1.1% on an annual basis to £310,609.
In the rest of the South it was a more mixed picture. In the East of England prices rose 0.1% month on month to £351,372 but they are 0.7% below a year ago. In the South East prices rose 1.1% month on month to £404,785, but fell 0.4% year on year.
In Greater London average asking prices were up strongly month on month by 2.4% to £618,432, but on an annual basis they are still 1.1% below where they were a year ago.
‘In a strange Brexit induced paradox, thousands of potential sellers are holding back compared to this time a year ago, though the number of buyers agreeing purchases is virtually the same. Ironically, this means that those who are coming to market have a better chance of selling, so while some would-be sellers are being put off, it’s actually a good time to sell,’ said Miles Shipside, Rightmove director and housing market analyst.
‘Those who are ignoring the Brexit disruption have less competition from stay away sellers, and their prospective buyers have less negotiating power, with a reduced choice of suitable alternatives,’ he added.
The average number of new listings per week was 24,539, the lowest total at this time of year since October 2009. This is down 13.5% on the same period a year ago. Shipside suggests that potential sellers are perhaps being deterred by the lack of price momentum, with not only a muted monthly price rise of 0.6%, but also average new seller asking prices 0.2% lower than this time last year.
He warned that while the number of buyers has held up well so far, the lack of new property listings coming to market now may reduce the number of purchases in coming months as there will be less choice of available properties to tempt buyers.
‘Some sellers are speculative, encouraged to try their luck if they judge that the market has a degree of froth which might increase their chances of banking a high price. With upwards pricing power now pretty flat, some sellers who are motivated by maximising their money seem to be holding back. They may be waiting for more certainty around both achieving their price aspirations and also the Brexit outcome,’ shipside explained.
‘While the number of new sellers has fallen, many of those who might normally have chanced their arm this autumn might in any case not have been seriously committed to making a move happen. This is a price-sensitive market, so if sellers are not willing to be realistic on their initial asking price, or to accept a lower offer, they can end up wasting time for both themselves and their agent,’ he added.
As sales aren’t falling through as regularly as they have been, it suggests that the market is currently being driven by must movers, according to Nick Leeming, Chairman of Jackson-Stops.
‘Despite Rightmove’s figures showing that stock is currently lower across the nation, once the UK does leave the European Union, whether that be on the 31 October or otherwise, I expect to see an increase in listings and greater activity levels, with the prospect of a modest uplift in property prices in the new year,’ he said.
‘However, to get the market moving properly again at all levels we do need some confirmation on stamp duty, which we hope will be delivered on Budget day. Prohibitive stamp duty charges have long been a challenge for those on all rungs of the property ladder, and so both buyers and sellers will now be eagerly awaiting Government’s plans on how they will address this. It was a key focus in Boris Johnson’s campaign to become Prime Minister and so it would be very disappointing if this was once again brushed under the carpet,’ he pointed out.