Housing affordability in Britain improving at fastest rate since 2011
The average asking price for property in Britain increased by 0.7% this month and is consistent with the growth recorded in February last year and the one before, the latest index shows.
But year on year asking prices increased by just 0.2% or £714, according to the data from Rightmove. The property portal’s report points out that this means that housing affordability is improving at its fastest rate or eight years with annual wage growth at 3.4% outstripping price growth.
But the picture is different according to location with asking prices in the North of England, for example, higher and those in the South falling year on year.
Asking price growth is led by growth of 3.6% year on year on Yorkshire and the Humber to an average of £187,813, followed by a rise of 3.4% in the North East to £ 151,303, and increase of 3.2% in the West Midlands to £222,647.
In contrast, asking prices were down year on year by 2.1% in Greater London to £614,182, followed by a fall of 1.4% in the South East to £395,240 and a fall of 0.2% in the East of England to £347,045.
In Wales asking prices increased by 2.9% on an annual basis to £192,246 and in Scotland they were up 1.6% year on year to an average of £148,576.
Rightmove also points out that there are some signs of buyer hesitancy in the property market with the number of sales agreed in January down 4% year on year. According to Miles Shipside, Rightmove director and housing market analyst, in theory the scene would be set for an active spring if it were not for the uncertain political backdrop.
‘As it is, the extent of that activity will depend on the degree of hesitancy among sellers to try to sell and be realistic on price, and buyers overcoming short term uncertainty and taking a medium term view that this is a good time to buy. As always those decisions will also be influenced by local market dynamics,’ he explained.
He believes that buyers will be encouraged to act by having more supply in all Northern regions apart from Wales, whilst all Southern regions are seeing hesitancy to come to market with fewer new sellers than at this time a year ago.
‘Prospective buyers in three of the four southern regions are seeing new seller asking prices cheaper than a year ago, indicating that buyers have the upper hand over sellers when it comes to negotiating a price,’ Shipside said.
‘This has obviously been a factor for some owners in those regions deciding not to come to market. Market conditions are more favourable for sellers further north though agents say that it’s still a very price sensitive market where asking too much at the outset scares off buyers,’ he added.
According to Nick Leeming, chairman at Jackson-Stops, both buyers and sellers are coming to the conclusion that now is as good a time as any to make a move while interest rates remain relatively low.
‘Prominent lenders such as HSBC are cutting their mortgage rates, including their 10 year fixed rate loan products, which is particularly welcome news for first time buyers and those looking to remortgage their properties over the next few months,’ he pointed out.
‘Although a decade long fixed rate mortgage may seem like a big commitment, particularly to those new to the market, locking themselves in could provide the assurance they need while the UK navigates through Brexit, and the wider uncertain political and economic landscape,’ he said.
‘Given that we currently have no clearer idea of our position outside of the European Union with so few weeks to go until Brexit day on the 29 March, it’s not surprising that some parts of the market remain hesitant,’ he explained.
‘However, for those looking to make a move the best advice we can give buyers is to do their research. There is a limited supply of stock coming to the market currently, so if a property ticks all of the boxes in terms of price, location, access to key amenities and good transport links, we would advise them to really consider purchasing the home,’ he added.