A lack of supply sustains rising house prices, but signs of a slow down in market activity
June 2014 House Price Watch indicates house prices are up on average 0.6% in the past month and up on average 7.9% in the past year
June 3, 2014
- Both Rightmove and LSL Property Services report sustained buyer demand; outstripping the supply of new properties. Rightmove reports “the supply of new properties to market is still unable to keep pace with demand, and whilst earlier months this year saw an encouraging increase in the number of new sellers, this month has see the number of properties coming to market fall by 1% compared to April.” Hometrack reports that supply continues to fall short of buyer demand but that the gap is narrowing as the growth in buyer demand begins to moderate.
- The Mortgage Market Review measures which place a greater emphasis on affordability are expected to help moderate the housing market.
- Both Nationwide and Halifax report that the market is showing signs of moderating as mortgage approvals in April are 17% below January’s peak. “It is too early to say whether nationally this is indicative of a cooling trend in the wider market. The slowdown may partly be the result of the introduction of MMR measures which may take a few months to bed down” Nationwide
- “With the more stringent Mortgage Market Review (MMR) lending conditions now in place, and tighter regulation and stress tests on banks, the borrowing process is slowing, but this isn’t a setback for the market as long as the government encourages a healthy flow of available housing stock” LSL Property Services
- “There are signs of slower activity in the mortgage market and we expect to see further signs of slowing house price momentum in the months ahead” Hometrack
Regional Summary – House prices have risen in all regions in the past year. London dominates house price growth – up 17% in past year
- In the past month, house prices are up in all regions but the North East and in the past year average house prices are up in all regions nationally.
- Annual house price growth in London is more than double that of any other region (at 17%). The East (7.8%) and South East (7.5%) follow.
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