Some positive signs for Autumn market including start of London recovery

Rightmove logo
  • A monthly rise of 0.7% (+£2,088) in the price of newly-marketed property matches the average for September since 2011, though the annual rise remains muted at 1.2%
  • Autumn market has stronger momentum in areas with better affordability and sentiment, with Wales, East Midlands, West Midlands and Yorkshire & the Humber all recording average annual price rises of at least 4%
  • After years of price falls in parts of London there are signs of renewed buyer activity at the upper end, with a 6% rise in number of sales agreed for homes of £750,000 and over compared to same month last year
  • ‘Back to school’ season offers more choice for buyers, with a 16% jump in new properties coming to market in the first week of September compared to the average of the final three summer weeks

 

Overview

The price of property coming to market has risen by a national average of 0.7% (+£2,088) this month, which is the same as the average monthly increase in September of 0.7% since 2011. The national annual rate of increase remains muted at 1.2%, but there are some positive signs for the Autumn market in regions where affordability and sentiment are good, although stretched buyer affordability or negative market sentiment in other regions are limiting price growth. Substantial price reductions in some parts of the London market over the last two years are now helping to improve sentiment and momentum, with renewed buyer activity evident at the upper end.

Miles Shipside, Rightmove director and housing market analyst comments: “Buyer affordability has been increasingly stretched by seven years of national average property price rises outstripping buyers’ average wage inflation. However in London, after asking prices rose by over 50% between 2011 and their peak in 2016, there have been two years of subsequent price falls in parts of the capital. Now, there are signs that these price reductions in parts of London have led to an upturn in buyer activity as sentiment improves.”

Less stretched buyer affordability and positive market sentiment have helped to buoy some regions to attain average annual rises of at least 4%: the East Midlands (+4.7%), Wales (4.6%), West Midlands (+4.5%) and Yorkshire & the Humber (+4.0%). Conversely, there have been year-on-year price falls in the North East (-1.1%), London overall (-0.5%) and the South East (-0.1%), with the East of England just reaching positive territory at +0.3%.

Shipside observes: “Buyer affordability ratios were not stretched to the same degree in the Midlands and the North than they were in the South, with a comparatively modest average price increase of 21% since 2011. That’s left some price momentum fuel still in the tank in these regions, and means that the current momentum has the mileage to carry on into this Autumn. That compares to the seven-year 40% plus price binge seen in London and its commuter belt neighbours of the South East and East of England, which is the cause of their current indigestion.”

The upturn in London’s buyer activity this month is in the upper end of the London market, above £750,000, comprising around a fifth of all transactions in London. The number of sales agreed above £750,000 is up by 6.0% on the same month a year ago, while below £750,000 it is down by 3.6%. Average asking prices in Inner London peaked in February 2016 at £823,000, and are now £756,000, which has helped with the increase in buyer activity.

Shipside says: “It’s been a hard and rocky road to recovery at the upper end of the London market, taking two successive years of price falls. London is a barometer and sometimes a catalyst for rises and falls in the rest of the UK housing market. The recovery in the upper end is encouraging but the painful and drawn-out process of price reductions has yet to run its course especially in parts of Outer London and the commuter belt that saw very sizeable and unsustainable price rises. More sellers and agents will need to re-adjust their expectations to be in line with what buyers are willing or able to pay, as it seems that buyers are out there if the price is right.”

Autumn traditionally sees a boost in activity and this will be fuelled by more choice for buyers with a 16% jump in new properties coming to market in the first week of September compared to the average of the final three summer weeks.

Shipside notes: “The start of the ‘back to school’ season sees a surge of sellers coming to market compared to the preceding quieter holiday period. Sellers aren’t hanging back in coming forward to try and sell, and with average prices just 1.2% higher than a year ago, many seem to be pricing sensibly.”

Agents’ Views

Joseph Robinson, Director for Stirling Ackroyd in London, says: “It’s of no surprise to anyone that the sales market in London has been tough over the past 12 months, however over the past few months we’re seeing positive signs of improvement within the sector. Not only have we just had a record July and August with regards to properties exchanging contracts, we’ve also seen a rise in sales being agreed across our offices, with an increase of 62% over the past two months alone. It has been occurring for years, but the London market really is shifting East. The applicants viewing with us are majority first and second-time buyers, but there has been a large rise in applicants at the upper end of the market not only viewing, but also purchasing. We feel confidence is returning to the London market after a long hiatus.”

Geoff Wilford, Founder of Wilfords Estate Agents in London, says: “We’re certainly seeing renewed buyer activity with sales enquiries up 15% in comparison to this time last year and sales agreed up 10%. Prices in central London have softened by 15% since the peak of the market in 2014. Buyer enquiries are up with a number of people believing now is a good time to buy when other people are selling. I’m of the firm belief that when the pendulum swings back from being a buyer’s market to a seller’s market the current levels of pent up demand will result in a price increase, as was witnessed back in 2013. In my opinion the smart money is buying now.”

Rightmove

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

You May Also Enjoy

Breaking News

Six UK vineyards where homebuyers avoid the 84% premium

Six affordable UK vineyards where homebuyers avoid the 84% house price premium and toast a better deal The latest research from Yopa has revealed that living close to one of the UK’s top vineyards will set homebuyers back an average of £494,739, 84% more than the current UK average house price. However, there remain a…
Read More
Breaking News

Red tape slashed to revamp high streets with new cafes and bars

Communities and town centres across the UK are set to benefit from a wave of new cafes, bars, music venues and outdoor dining options, as the Government slashes red tape to breathe new life into the high street. Government to overhaul planning and licensing rules to make it quicker and easier for new cafes, bars…
Read More
Breaking News

London’s prime parks command 86% property premium

The latest research from Jefferies London has found that buyers hoping to live within arm’s reach of one of the capital’s royal parks will need to stump up a serious property price premium, with the average price of property around these green spaces coming in 86% higher than the average London house price. Jefferies London…
Read More
Planning disputes on new build land
Breaking News

Padel Boom Sparks 113% Surge in Planning Applications

17,000 UK Sites Ripe for Development New insight from Searchland reveals that planning applications for padel courts surged by more than 113% in 2024, with the upward trend expected to continue throughout 2025. The explosive growth of the sport in the UK has unlocked a wealth of potential for developers and investors, with Searchland estimating…
Read More
Breaking News

Property values rise at 5.3 times the rate of earnings

House prices across Britain rise at 5.3 times the rate of earnings in the last year The latest research from eXp UK has found that the average house price in Great Britain has increased at 5.3 times the rate of average earnings over the past year, highlighting a widening affordability gap for homebuyers. eXp UK…
Read More
Estate Agent Talk

London homes with a patio prove hot property,

The latest research from Benham and Reeves has found that London homes offering a patio have become highly sought after, with 41% of all patio-equipped properties currently listed already snapped up by eager homebuyers. However, potential buyers dreaming of a summer-ready outdoor space might face challenges, as only 8% of properties currently on the market…
Read More