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Marginal year-on-year rise for transactions and prices

by LLP Reporter
17th Jun 19 1:26 pm

Newly released data from LSL has shown that both prices and transactions rose marginally over the twelve months from May last year, suggesting market growth, albeit slow.

According to the figures, year-on-year prices and transactions grew despite both falling somewhat on a monthly basis after seasonal adjustment. Transactions, estimated at 70,750 in May, showed a +7% increase on our (estimated) 66,250 April total. After adjusting for the normal seasonal rise in sales, transactions were down -7% month-on-month. Nevertheless, the number of sales rose +0.6% from last year.

The average of all prices paid for houses in England & Wales rose as well over the twelve months to May, by c.£1,000 – or +0.3%. This was despite having fallen by some £250 since the start of the year. Subdued price movement over the last twelve months at England & Wales level, with a maximum monthly change of only ±0.7%, suggests that all is quiet on the housing front. But the regional heatmap and table of conurbation prices below tell a different story.

Key Insights Like so much else, the England & Wales housing markets are evolving. Despite the political situation, there is some evidence that the pent-up demand held back by events of the last few months is breaking through. Clearly, this will be selective, with certain types of buyers in specific markets taking the plunge: perhaps where cooling has been most evident, as in London. With a favourable exchange rate and reduced prices, foreign buyers are returning to the London market in particular, taking the view that this is a good long term buy-and-hold.

However, not all markets are in the same position: in some, prices have remained subdued for a decade or more. But continued wage growth and low levels of unemployment suggest more buying power in the marketplace, aided of course by strong mortgage competition and low interest rates.

% Annual price change in the regions

Six of the ten GOR regions saw annual price growth in April. Although Wales topped the list, this was more to do with the introduction of LTT (Land Transaction Tax) in April last year than with an upturn in demand for houses

The North West followed Wales with a +2.5% price rise and the red band from Yorkshire to the South West shows regional price rises from 0.4% to as much as 1.5%.

However, the blues in the south-east corner of England indicate falling prices in the regions neigbouring Greater London- where the price change was -0.2% this month.

It is relevant that the Government’s CPIH rate of inflation was 2.0% in April, up from the 1.8% from January to March 2019. There were two regions which exceeded this rate and hence saw a rise in house prices in real terms – the North West at 2.5% and Wales at 3.1%.

Peter Williams, Acadata Chairman said, “Reflecting the somewhat more buoyant mood in at least some markets, we have seen a rise in mortgage approvals for house purchase and re-mortgaging.

“The current consultation by the Financial Conduct Authority around mortgage advice suggests a growing appetite to help ease the ways consumers can access an appropriate mortgage. At the same time we have the Bank’s Prudential Regulation Authority warning the market not to weaken credit standards.

“The positive news on average earnings masks considerable divides, with younger and lower and middle income households not enjoying the same level of income inflation as those in higher wage brackets.”

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