House Price Watch Issue 5 – June
What's happening to house prices?
National summary – Nationally, house prices rise again this month
This was the fourth consecutive monthly rise in house prices. A lack of housing for sale remains a key element of the market and driver of price increases. Construction figures indicate a further decline in building activity from already depressed levels. Hometrack point to two further factors adding pressure to supply: first is an increase in numbers of first time buyers who add to demand but have no property to sell and second is existing owners looking to secure a property to buy before putting their homes on the market.
All indices report a rise in UK house prices over the past month, although the rate of growth looks to be slowing slightly. The average increase is 0.6% in June vs 0.8% in May (reported national house price increases over the past month range from 0.1% by Land Registry up to 1.2% by Rightmove).
House prices are significantly higher than June last year (on average up 1.9% year on year).
Jeremy Leaf, north London estate agent and chartered surveyor, responding to our House Price Watch, says:
“London results undoubtedly skew the figures for the rest of the country. The property industry is made up of countless micro markets where local factors such as school catchment areas may have just as much impact as confidence in the economy generally.”
“I believe improvements in access to finance, which has increased demand over the past month particularly, won’t necessarily amount to a meaningful recovery while supply remains relatively low. Delays in locating surveyors & down-valuations are adding to transactional problems.”
“On lettings, tenant numbers have fallen in response to greater first-time buyer interest especially in the government’s ‘Help-To-Buy’ scheme. As a result, landlords have been negotiating even harder to retain tenants as otherwise face the prospect of rent reductions of between 5 & 7.5% in order to maintain occupations.”
Regional summary – Regionally, East Midlands tops monthly rise in house prices
The East Midlands experienced the biggest growth in house prices this month (up 1.1% on average) – up £1500 in the last month to £142,163.
Growth in house prices is evident in most areas of the country (apart from Wales and East Anglia). The North West (up 1%) and London (up 0.9%) show strong rises alongside the East Midlands.
There continues to be a North/ South divide in terms of property prices. London’s average house price is now close to £450,000; 5% up since June last year according to Land Registry figures. In contrast, all areas outside of the South have an average house price well below £200,000; with house prices at their lowest in the North East (average house price £121.471).