House Price Watch Nov 2021
It has been the busiest housing market in 14 years but the outlook for next year is less certain. House prices are up again this month but transactions have slowed. Looking ahead, it is difficult to predict what impact the Omnicron variant and the rising cost of living will have on consumer confidence and the wider economy. However, with the Bank of England raising interest rates for the first time in more than 3 years, transactions are likely to return to more normal levels and house price growth is likely to be more subdued.
What’s happening nationally
House prices are up on average +0.3% in the past month and +9.5% in the past year.
Indices based on:
Land Registry – registered property transactions in September.
Nationwide & Halifax – mortgage valuations in October.
Rightmove – asking prices posted on Rightmove in October.
*Rightmove is not included in the index average as the basis for its index is different (asking price vs agreed sale price)
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House prices in your area
House prices have increased in all UK regions, with the highest rises over the past year in Wales (+15.5%), the East Midlands (11.7%), the East of England (+11.2%) and Yorkshire & Humber (+11.1%).
London has seen the slowest rise in house prices this year, but prices are still up 6.2%.
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Buyer demand is up again this month but housing stock is further depleted as new seller instructions decline.
Seller’s market continues with time to sell well below the annual average.
But, overall, the number of home sales is down this month; one of the slowest months of 2021.
How busy is the market?
- Not busy
- Very busy
- Transactions among lowest of 2021
- Total transactions in October 77K
- -52% from last month
- -28% lower than October last year
Homes for sale vs homebuyers
- Good availability of homes
- Shortage of homes
- Buyer enquiries up (+13% RICS); buyer demand continues to rise
- Seller enquiries down (-18% RICS); eighth month in a row
- Average stock per agent 46; lowest stock of 2021 (incl under offer/ Sold STC Rightmove)
Average speed of sale
- 37 days to find a buyer no change from last month (12 month average 50 days Rightmove)
What the experts say
“While market activity remains robust, this pre-Christmas price lull is aiming to attract festively distracted buyers. It offers a small window of opportunity for bargain hunters before the traditional Boxing Day buyer resurgence. The number of people browsing properties on Rightmove on Boxing Day last year was over 50% higher than the previous year. With this immediate post-Christmas Day activity having become the norm, estate agents report that many homeowners are already getting their homes spruced up, with their marketing launch carefully timed to coincide with this wave of new buyers.”
“There have been signs of cooling in housing market activity. Transactions were down almost 30% year-on-year in October. But this was almost inevitable, given the expiry of the Stamp Duty holiday. But, activity has been extremely buoyant in 2021. Transactions so far this year have already exceeded the number recorded in 2020 and are tracking close to the number seen in 2007, before the global financial crisis. Underlying activity appears to be holding up. Mortgages approved for house purchases in October were above the 2019 monthly average. It is unclear at this stage what impact the new ‘Omicron’ variant will have on the wider economy. While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in cost of living.”
“The performance of the market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition amongst mortgage providers keeping rates close to historic lows. Looking ahead, there is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation. Economic confidence may be also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.”
“House price growth is easing as we approach the end of the busiest market since 2007. One in 16 privately owned homes has changed hands this year, compared to one in 20 in 2019. However, the total stock of homes for sale is down more than 40% on the five-year average. New supply will start to rise at the turn of the year as households use the holiday period to make a decision around making a move. We expect house prices to rise by 3% next year, and forecast 1.2 million transactions, down from 1.5 million this year, but in line with the average number of transactions over the last five years.”
“Results continue to suggest a lack of new instructions is holding back market activity. Indeed, despite new buyer enquiries rising over the month, a slightly softer trend in agreed sales was once again cited alongside a further decline in fresh listings. This constrained supply backdrop is also underpinning price growth, which has shown no sign of easing over the latest survey period.”