Prices set to fall in England but rise in rest of UK over next three months
Property prices in England are set to dip over the next three months but rise in Scotland, Wales and Northern Ireland while overall the housing market is expected to continue to show resilience in the face of political and economic uncertainty.
There are likely to be small monthly falls over September, October and November in England, according to the latest forecast from Reallymoving, but it says this is mainly due to seasonality, with prices peaking in August and tailing off through autumn.
Average house prices are likely to fall by 0.9% month on month over the quarter with a decline of 1.4% in September, 0.3% in October and 1% in November.
As buyers register for quotes for home move services on the site typically twelve weeks before their purchase completes, Reallymoving says it is able to provide a three-month property price forecast based on the purchase price agreed. Historically, the data has closely tracked the Land Registry’s price paid data which is published retrospectively.
However, when adjusted for seasonality and mix, average values show positive growth over the coming three months, which suggests the forecast falls in real terms are seasonal rather than reflecting a drop in the underlying value of property.
Deals agreed in August will reflect a fall of just 1% when those sales complete in November, which indicates the housing market is continuing to hold firm, supported in part by a lack of stock available for sale.
Year on year, house prices are on course to remain in positive territory throughout the autumn. A 3% annual increase forecast for September will be the highest rate of annual house price growth for almost a year, followed by 2.7% in October and 2.1% in November 2019.
The firm says that underlying conditions in the wider economy, such as low unemployment, low interest rates and rising household incomes continue to underpin the housing market and support steady year on year growth.
House prices in Wales, Scotland and Northern Ireland are expected to continue their upward trajectory, with values forecast to rise by 8.7%, 3.8% and 1.9% respectively over the next three months.
In England prices set to fall across the North, declining in the North East, North West and Yorkshire and the Humber, as well as in the South East by 1%, in the South West by 2.2% and in the East by 1.8%.
London is set to see a moderate bounce of 1.5% overall in the three month period from September to November, but a dip of 2.3% forecast for November suggests that buyers in the capital were more cautious in August, factoring in a buffer to protect them from future price falls.
‘Considering the current political situation, the UK housing market continues to show remarkable resilience. House prices are on course for minor monthly falls in September, October and November, but while the temptation is to attribute this to Brexit, in fact it is largely down to seasonality with the market following its usual pattern of peaking in August then tailing off steadily through autumn,’ said Rob Houghton, chief executive officer of Reallymoving.
‘The London market has proved to be most vulnerable to the political situation and the data suggests buyers were more cautious in August when No Deal Brexit rhetoric peaked, prompting a 2.3% monthly fall in prices agreed which will translate to completions in November,’ he pointed out.
‘Nationally, annual growth is set to remain in positive territory throughout the autumn, indicating that people are continuing to press ahead with home moves and the underlying value of the housing market remains stable,’ he added.