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House prices continue to rise — up on average 0.8% in the past month – Issue 8

Rising house prices continue this month as demand outstrips supply but there are signs of a more fluid housing market with first-time buyers returning and more homes coming on for sale (which may begin to narrow the supply gap and stem price inflation)

 

 

Housepricewatch_Nov 2013

National Summary

The average monthly increase is UP 0.8%

The average annual increase is UP 4.5% note: Rightmove excluded from average calculations as basis of index on asking prices is different from other main indices

Rising house prices continue this month as demand outstrips supply but there are signs of a more fluid housing market with first-time buyers returning and more homes coming on for sale (which may begin to narrow the supply gap and stem price inflation)

  • First time buyer mortgages are at their highest level in 5 years according to recent CML data (as a result of low mortgage rates supported by official schemes: Funding for Lending and Help to Buy). The return of first-time buyers may be helping activity along the housing ladder “The return of the first-time buyer is starting to unclog the blockage at the bottom end of the market which is helping to make the whole system more fluid. Demand has raced ahead of the supply of homes causing house prices to rise. Think of it as shaking up a can of coke. When it is opened, you get the fizz, froth and overflow, then it flattens out again.  That’s what we are seeing. Demand has been bottled up by a lack of mortgage finance, but now that mortgages have been made more accessible, the backlog of buyers has spilled onto the market after years of frustration scrimping and saving” LSL Property Services
  • The number of homeowners providing instructions to put their property on the market for sale increased for the seventh successive month in August (Source RICS)

Regional Summary

While house prices are up in many areas, rises in London are more dramatic than those observed in the rest of the country up 1.4% in the past month and 9% year on year

Growth in house prices is evident in many but not all areas in the past month (declines are noted in Wales and are static in the Midlands).  London (up 1.4%), and North East (up 1.4%) experienced the biggest rises in the past month

The North/ South divide continues. London’s average house price exceeds £460,000; up 9% since September last year according to Land Registry figures.  Areas outside the South and East have an average house price below £200,000; lowest in the North East (£123,000) “The strongest increase in demand over October was seen in London and this is maintaining pressure on prices” Hometrack

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