Dwindling stock in north drives prices to new national record

 

  • New record in asking price of newly-marketed property for third consecutive month as steady monthly increases continue, with a 0.4% (+£1,364) rise
  • Spring market concludes with stronger number of sales agreed overall in May, just 2.0% down on May 2017, and up 5.4% on May 2016
  • However, market conditions vary significantly between the north and south:
    • Strong buyer activity in northern regions has shrunk available stock levels by an average of 4.3% when compared to a year ago, restricting buyer choice and giving sellers upwards pricing power
    • In contrast the less active southern regions all have more available stock, up by an average of 17.5% compared to a year ago, a driver for a buyers’ market and some downwards price pressure

The average price of newly marketed property continues its gentle upward trend and for the third consecutive month has hit a record high due to a 0.4% (+£1,364) rise. Also following a consistent pattern is the current 1.7% annual rate of increase, which has remained stable between 1.1% and 2.1% every month so far in 2018. May’s overall sales agreed numbers are in familiar territory too, and while 2.0% down on May 2017, they are up 5.4% on May’s figures for 2016. Whilst all of these measures at a national level point to a steady market, closer inspection reveals, as ever, that there are very different local markets. In this case, conditions are varying significantly between the northern and southern halves of Great Britain.

Miles Shipside, Rightmove director and housing market analyst comments: “The national average new seller asking price continues to creep upwards, setting a new record for the third consecutive month. Sales agreed by estate agents overall in May have bounced back from a slower start to the year and while still slightly below May last year they are ahead of 2016. This is a pleasingly strong flourish at the end the spring selling season given the political uncertainty and stretched buyer affordability. At an initial glance all of this fits with a theme of ‘steady as she goes’ as the spring market concludes. However, if you dig a bit deeper, you’ll find that the main driver is good buyer demand in the comparatively stock-starved northern half of Britain’s housing market. This demand, fuelled by prices that in comparison to the south are still relatively affordable, have meant the number of properties left available to buy has dwindled in the north and increased in the south.”

The northern regions on average have 4.3% less available stock for buyers to choose from compared to a year ago, giving sellers potential upwards pricing power. In contrast all the southern regions have more buyer choice, with available stock up by an average of 17.5% compared to a year ago, a driver for a buyers’ market and some downwards price pressure.

Shipside observes: “The reduction in property choice for buyers in the north compared to a year ago is a result of property for sale being snapped up, meaning it’s more of a sellers’ market there. In marked contrast the jump in buyer choice in all southern regions shows there are signs of a sellers’ market in some areas. With the year at mid-point the 2018 summary so far is that the chances of sellers finding a buyer in the northern regions seem to have held up very well against the previous year, but market conditions are clearly more challenging for sellers in much of the south.”

At a regional level, Wales and Scotland have the greatest drop in available stock, with 10.3% and 10.4% fewer properties for sale compared to a year ago respectively. Yorkshire and the Humber has 6.3% less choice for prospective buyers than a year ago, with the North West seeing a drop of 4.1%. The North East (-2.3%) and the West Midlands (-2.2%) have smaller decreases in available stock, and the only northern region to see an increase is the East Midlands with a 4.0% uplift. All southern regions have seen a stock increase compared to a year ago, indicating more challenging market conditions. The East of England has 24.9% more properties up for sale, and the South East has 20.0%. London has a smaller increase of 16.4%. The South West completes the southern stock picture with an 8.2% increase in available stock.

Shipside advises: “With the normally more active spring buyer market over and with some potential buyers likely to be distracted by summer holidays and World Cup-itis, the goal posts have just moved. Sellers in locations that have seen larger percentage increases in the number of unsold properties will have to price lower than properties they are competing against, as there are few better tactics than a bargain price to tempt buyers. It’s likely to take extra time to sell over the next few months, especially in the southern half of Great Britain.”

 

Rightmove

UK Property news updates shared directly from Rightmove PLC - the country's leading property portal.

You May Also Enjoy

Breaking News

First-Time Buyers Prioritising ‘Forever Homes’

A third of first-time buyer purchases are semi-detached properties, as young people turn to ‘forever homes’   Barclays mortgage data shows semi-detached properties rose in popularity in August, accounting for 33.5 per cent of first-time buyer purchases Four in 10 Barclays first-time buyer customers chose mortgages allowing them to complete their repayments over a 30+…
Read More
Estate Agent Talk

Closing the gap on client relationships and recommendations

New research from iamproperty has highlighted the growing disconnect between what buyers and sellers want from their agent and what they experience, which could be killing recommendations from happy clients. iamproperty’s quarterly consumer survey revealed that only a third of respondents (32%)¹ would recommend their agent following their experience. With many agents relying on recommendations…
Read More
Estate Agent Talk

Northern Ireland to expect over 25,000 new home movers

Belfast-based estate agency John Minnis has revealed that Northern Ireland is to welcome an estimated 25,000- 30,000 new arrivals from the UK and Europe over the next five years, as migration to the region reaches its highest levels in more than a decade. Recent figures show that 11,700 people relocated from other parts of the…
Read More
Breaking News

Red tape and rising costs stifling new-build availability across the capital

The latest analysis from London estate agent, Benham and Reeves, has revealed how protracted building timelines are preventing the capital’s housebuilders from delivering the level of new-build housing stock required to meet demand, with new homes currently accounting for just 7.5% of all properties listed for sale across London. Benham and Reeves analysed the latest…
Read More
Estate Agent Talk

UK’s new wave of ‘second cities’ offers strongest yield growth for property investors

The latest research from West One Loans has found that whilst investors may continue to favour the nation’s key cities such as London, Birmingham, and Manchester, a new wave of ‘second cities’ is delivering the strongest growth in rental yields. These emerging markets are offering investors the chance to achieve attractive returns, driven by rising…
Read More
Estate Agent Talk

Decline in change of use further constricting housing supply

Jonathan Samuels, CEO of Octane Capital, believes that a decline in conversion projects could ultimately prevent the Government from hitting its ambitious housing delivery targets, as the firm’s latest analysis has revealed that the number of homes created through change of use has fallen sharply in the last five years. Octane Capital analysed official Government…
Read More