The latest data and analysis from Rightmove has revealed that average new asking prices are close to a record high, up 0.3% on a monthly basis at £309,348, with new all-time price highs in the east midlands, north west, Wales, and Yorkshire & the Humber.
According to the figures released this morning, the new all time highs have pushed the national average to within £91 of a new record despite backdrop of political uncertainty.
Rightmove also revealed that, across the UK, property supply and sales are sliding further as buyers continue to play their waiting game. In the most difficult areas, according to Rightmove, agents must value new instructions below the asking prices of similar properties on the market if they stand any chance of achieving a sale.
The report highlights that there is “some hesitancy to engage in the market” in the south – although buyer demand remains strong the north.
Miles Shipside, Rightmove director said, “With the country supposedly consumed by the twists and turns of Brexit, it’s surprising that the price of property coming to market is within a whisker of setting a new record. At £91 below June 2018’s figure of £309,439, it’s within touching distance of the previous high. More buoyant markets in the north and midlands are helping to nudge up prices due to the seemingly relentless strength of buyer demand. Buyers in four regions are seeing higher new seller asking prices on average than ever before.”
The regions setting new all-time price highs are the East Midlands, the North West, Wales and Yorkshire & the Humber. These regions are also outperforming the national average in the key metrics of number of properties coming to market and the levels of sales agreed so far in 2019. At the mid-point of 2019 new seller supply remains constrained nationally, down by an average of 5.0% versus the same period in 2018.
Shipside said, “The national trend sees new seller supply down by an average of 5% so far this year compared to the same time last year, indicating some hesitancy on the part of would-be sellers, especially notable in parts of the south. However, these better-performing northerly regions are all beating that national average. In the East Midlands, new seller supply is up by 0.3%, in Yorkshire & the Humber it’s down by just 0.2%, in Wales it’s fallen by 2.5% and in the North West it’s dropped off by 2.7%.”
This regional pattern is also evident in the number of sales being agreed, though again the more difficult national market backdrop has an effect. The more marked reluctance of would-be sellers in the south to come to market means less property choice for buyers and fewer sales agreed in those regions. Despite this, the national average for the number of sales agreed in the first half of the year is down by only 4.3% on the same period last year. The regions which have set new price records are again all selling better than the national average, with Wales 0.2% ahead of last year, Yorkshire & the Humber down by 1.9%, the North West dropping off by 3.3%, and the East Midlands down by 3.7%.
Shipside added, “The national market faces a range of challenges, with overall average asking prices barely changed from last year, and activity levels slightly lower. Some buyers are hesitant due to the long-drawn-out uncertainty of Brexit, and there is also a slight tightening of mortgage availability and stretched buyer affordability, especially when it comes to raising a deposit.
“There is however a marked north/south divide as all northern regions are selling better than those in the southern part of the UK. On average the number of sales agreed for the year to date in the northern regions is down by 1.7% compared to the same period last year, while success at selling is more elusive in the southern regions which are down by an average of 7.1%.
“To sell in these more difficult locations you have to undercut the asking prices of similar properties, and preferably have a well-finished and expertly marketed home that will all combine to stir hesitant buyer interest.”
As ever, the property industry was quick to react. Here’s what they’re saying:
Tomer Aboody, director of property lender MT Finance said, “Once again, this data shows that the market is feeling confident, or at least people have decided that if they need or want to move, then now is the time to do so. Political uncertainty can only bring buyers and sellers to a standstill to a certain extent.
“What is a real positive is that the average house price is nearly at a record level, while the southern regions are down. This shows that it is the activity and demand in the northern regions which is pushing prices up, rather than already high-valued properties in London.
Jeremy Leaf, north London estate agent and a former RICS residential chairman said, “Of course these are just asking, not selling prices, but they still represent useful and interesting market trends showing how the market is very patchy and varies from street to street, not just region to region. Asking prices are often determined by buyer or estate agent optimism and expectation, not necessarily realism but the increase in sales agreed is particularly relevant as it also reflects nervousness among sellers and lack of choice for increasing numbers of buyers in many places.
“Looking forward, it is clear some areas are more price-sensitive than others and Brexit is not a big issue everywhere. Nevertheless, political certainty will add to confidence and is likely to release more pent-up demand as buyers and sellers can’t sit on their hands indefinitely.”
Shepherd Ncube, founder and CEO of Springbok Properties said, “These latest figures suggest that a degree of seller optimism has returned to the UK market with a consistent increase in asking prices so far this year pushing the national average close to a new record.
“However, sellers should still approach with an air of caution as current market conditions will continue to see unnecessarily overpriced properties languishing for months on end with little buyer interest.
“Pricing appropriately based on your local market landscape will ensure a smoother sale for the highest price, but as the current north-south divide demonstrates, this should be based on regional buyer appetite and not personal or sentimental feeling.”
Marc von Grundherr, director of Benham and Reeves said, “London continues to cool where seller expectation is concerned but this decline is starting to slow and the time it’s taking to sell has also reduced considerably, suggesting more realistic asking price trends are enticing buyers back into the fray.
“Affordability and Brexit uncertainty continue to act as market anchors but not to the degree that we’ve seen in previous months.
“The silver lining to faltering asking price levels and the addition of low mortgage rates is that market conditions are currently perfect for first-time buyers and as a result, it is this demographic leading the charge in a market otherwise blighted by Brexit angst.
“Zone 3 seems to be the London landscape of choice for the capital’s buyers, providing a greater deal of property for the price tag while remaining within touching distance of the city for those looking to put down roots.”