New sellers on the market are being more realistic about their prices, according to latest figures from Rightmove.
The property portal reports a 2.3% drop in prices of newly marketed property – down, on average by £7,218 to £301,973 in August – as sellers hope to move by Christmas - just 18 weeks away.
The drop in asking prices is more significant because of a subdued market in London and the South East. Excluding those regions from Rightmove’s figures, asking prices have only dropped by 1.5%.
Miles Shipside, Rightmove director and housing market analyst, comments: “Sellers who come to market in the peak holiday month often have a pressing need to sell and price down accordingly, offering ‘summer sale’ prices to entice holiday-distracted buyers.”
Analysing the year-on-year figures, Rightmove reports asking prices from new sellers are just 1.1% higher than a year ago. Meanwhile, sales-agreed numbers are broadly flat, down by 0.8% compared to August 2017.
Mr Shipside adds: “New sellers who are motivated by the 18-week Christmas deadline need to agree a sale to a buyer much more quickly than the average eight weeks that it takes and perhaps also compress the average 13 weeks between agreeing a sale to a buyer and moving in. That’s a nail-biting total of 21 weeks that they need to try to cut down.”
Key stats at a glance
- UK House Price Index, June 2018: House prices up by 3% annually. Average price of a UK property: £228,384. Monthly change: 0.4%
- Halifax House Price Index, July 2018: House prices up by 3.3% annual. Average price of a UK property: £230,280. Monthly change: 1.4%
- Nationwide House Price Index, July 2018: House prices up 2.5% annually. Average price of a UK property: £217,010. Monthly change: 0.6%
- Rightmove House Price Index, August 2018: Asking prices up by 1.1% annually. Average asking price of a UK property £301,973. Monthly change: -2.3%
While Rightmove looks at asking prices in August, the government’s UK House Price Index (HPI) analyses sales completed for June – so is a true reflection of Britain’s housing market, albeit for two months ago.
It found that UK house prices grew by 3% in the year to June 2018, up by 0.4% since May – the lowest rate of growth since August 2013. London prices also lagged behind, with house prices down -0.7% over the year.
On a monthly basis, the West Midlands saw the most significant price rise – up by 1.9%, while property prices fell the most in the North East, down by 1.9%.
Commenting on the data, Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Although a little out of date, these numbers represent the most comprehensive survey of UK house prices.
“House price growth outside London is being supported by a continuing shortage of stock whereas the capital and the South East can’t hide behind this excuse any longer. Price drops are continuing and reflect a new realism in the market – if you want to sell your property, it needs to stand out and price is the obvious way of doing it.”
Jonathan Samuels, chief executive of property lender Octane Capital, adds: “That the annual growth rate in London is at its lowest level since September 2009, when the UK economy was reeling from the global financial crisis, underlines the weakness of the capital’s property market.
“The London property market has gone from hero to below zero in a matter of a few years. For the capital to be in a photo finish with the North East over the past year is a stark reminder of how volatile the UK property market can be in the short term.”
1% house price rise predicted over 2018
Meanwhile, Nationwide reports annual house price growth of 2.5% in July and prices up 0.6% since June.
Robert Gardner, Nationwide’s chief economist, says: “There was a slight uptick in annual house price growth in July to 2.5%, from 2% in June. Nonetheless, annual house price growth remains within the fairly narrow range of circa 2% to 3%, which has prevailed over the past 12 months, suggesting little change in the balance between demand and supply in the market.
“Overall, we continue to expect house prices to rise by around 1% over the course of 2018,” he adds.
Jonathan Hopper, managing director of Garrington Property Finders, comments: “Two steps forward, one step back – Nationwide’s annual rate of price growth has barely shifted from where it was a year ago.
“It’s tempting to see such a meandering market as the fruit of a cautious consensus. Instead, it’s a by-product of the collision of three conflicting forces; pent-up demand, low supply and patchy confidence.
“With activity levels slowly picking up, the rising tension is creating some big regional anomalies – making the national average as misleading as it is insipid.
“If the traditionally busy ‘back to school’ months ahead fail to deliver greater confidence, the shattered pieces of the market will drift further apart.”
Market ‘broadly flat’
Halifax’s figures show that prices in the past three months to July were 3.3% higher than in the same period in 2017 – the largest increase since November 2017. House prices in the three months to July were 1.3% higher than in the previous quarter and were up by 1.4% since June.
Russell Galley, managing director at Halifax, says: “While the quarterly and annual rates of house price growth have improved, housing activity remains soft. Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year.”
Russell Quirk, chief executive of hybrid agency Emoov, says: “While these house reports cover the whole of the UK and provide us with an average, which, of course, can conceal regional idiosyncrasies, the current trajectory of the UK property market is one that favours homeowners, both existing and aspiring.
“Many voices will be quick to highlight a ‘lacklustre property landscape’, but the highest increase in prices since November speaks for itself and is still palatable, if not absolutely ideal, for both groups.”
Halifax House Price Index – This UK-wide index is based on the house purchase price at the mortgage approval stage. It calculates the annual change as an average for the latest three months compared with the same period a year earlier as it says its figures provide a better picture of the underlying trend compared to a monthly year-on-year number as they smooth out any short-term fluctuations.
Nationwide House Price Index – The data for this index for the whole of the UK is drawn from Nationwide’s house purchase mortgage lending at the post-survey approvals stage.
Rightmove House Price Index – The data is compiled from the asking prices of properties when they first come on to the market via over 13,000 estate agency branches listing on Rightmove.co.uk. The sample includes up to 200,000 homes each month – representing circa 90% of the market.
UK House Price Index – The UK HPI uses house sales data from HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland and is calculated by the Office of National Statistics.