London has seen an unseasonal price surge of 1.3% in just one month despite a huge increase in supply of property for sale.
Coupled with last month’s rise of 1.1%, this puts London prices back on a rising trend following the summer dip caused by a correction in mainly prime properties. Homebuyers in the capital now enjoy over 50% more choice than they did at this time last year, but the typical London property is now 15% more expensive.
Take London out of the equation, and the UK property market is cooling in line with seasonal expectations. Prices are edging back in most regions after what was a solid year, especially in the South. Fierce competition in the fixed rate mortgage market and relatively low supply of property for sale will ensure demand stays strong into 2015.
Regional Market Round-up
Home prices rose by 0.2% across England and Wales during the last month, but this was due almost entirely to the rise in Greater London. Elsewhere in mainland UK, price rises are either subdued or negative as befits the seasonal downturn at this time of year. Moreover, the North-South divide still prevails as can be seen in the 6-month price change chart. Scotland, Yorkshire, Wales, the North West and the North East all registered falls this month.
The worst performing region over the last six months has been the North East. A fall of 0.9% since May is a very poor performance for what has been the best year for UK property prices since the onset of the financial crisis. Wales, the North
West and Scotland are not much better and only just managed to keep in positive territory. Within those areas, it is only the more upmarket locations that are supporting the regional averages.
Across the UK, supply of property for sale is steadily increasing but remains historically low. The number of properties that entered the market last month was 14% higher than during October 2013. Areas of great demand, such as London, will be less sensitive to rising demand, while Scotland, which has a much weaker property market, has registered an annual rise of 18% in the number of properties for sale. This will likely thwart further price rises in 2015 north of the border. In Wales and the other English regions, we have observed only minor increases in the volume of sales properties coming onto the market.
Year-on-Year Asking Price Change Falls Further
The average mix-adjusted 12 -month change in asking prices for England and Wales reached a maximum in June (9.6%) and is steadily falling back. The average year-on-year price change trend for England and Wales (shown below) shows an end to the accelerating price growth observed over most of the last two years. Annualised gains are being eroded in the current cooler market, and we expect this gentle downtrend to continue into 2015.
Take London out of the equation, and the UK property market is cooling in line with seasonal expectations. Prices are edging back in most regions after what was a solid year, especially in the South. Fierce competition in the fixed rate mortgage market and relatively low supply of property for sale will ensure demand stays strong into 2015.
Regional Market Round-up
Home prices rose by 0.2% across England and Wales during the last month, but this was due almost entirely to the rise in Greater London. Elsewhere in mainland UK, price rises are either subdued or negative as befits the seasonal downturn at this time of year. Moreover, the North-South divide still prevails as can be seen in the 6-month price change chart. Scotland, Yorkshire, Wales, the North West and the North East all registered falls this month.
The worst performing region over the last six months has been the North East. A fall of 0.9% since May is a very poor performance for what has been the best year for UK property prices since the onset of the financial crisis. Wales, the North
West and Scotland are not much better and only just managed to keep in positive territory. Within those areas, it is only the more upmarket locations that are supporting the regional averages.
Across the UK, supply of property for sale is steadily increasing but remains historically low. The number of properties that entered the market last month was 14% higher than during October 2013. Areas of great demand, such as London, will be less sensitive to rising demand, while Scotland, which has a much weaker property market, has registered an annual rise of 18% in the number of properties for sale. This will likely thwart further price rises in 2015 north of the border. In Wales and the other English regions, we have observed only minor increases in the volume of sales properties coming onto the market.
Year-on-Year Asking Price Change Falls Further
The average mix-adjusted 12 -month change in asking prices for England and Wales reached a maximum in June (9.6%) and is steadily falling back. The average year-on-year price change trend for England and Wales (shown below) shows an end to the accelerating price growth observed over most of the last two years. Annualised gains are being eroded in the current cooler market, and we expect this gentle downtrend to continue into 2015.
Surprise surge in London Prices as rest of UK cools ...
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