North/south sales divide in the Autumn market
- Price of property coming to market increases by 0.9% (+£2,623) this month to £309,122, just 0.4% (£1,349) below the all-time high reached in June
- Sales agreed in September have recovered from summer lull, now down just 4% on the post-election boosted same period in 2015, and up 6% on 2014
- Sellers’ market in the north of the country with sales agreed up on 2015 and available stock down
- Buyers still have upper hand in the south – sales agreed are recovering but down on 2015, and stock is up
After two consecutive falls in July and August, the price of property coming to market has now risen for two months. This month’s increase of 0.9% (+£2,623) puts the national average at £309,122, just 0.4% (£1,349) short of the record set in June of this year. However, different areas of the country and different sectors are experiencing contrasting market conditions, with a north/south divide currently emerging in this year’s autumn market.
Miles Shipside, Rightmove director and housing market analyst comments: “After the referendum result and the usual summer slowdown, estate agents’ experiences appear to fall into one of two camps, with a definite north/south divide. Agents in the northern half of the country reported a quiet week or two after the surprise result of the Brexit vote, but most then saw a quick return to good levels of buyer enquiries and subsequent sales agreed. In contrast many in the southern regions saw more prolonged hesitancy among buyers, with it taking until September before a marked pick-up in activity. What has continued is the overall upwards trajectory in the average price of property coming to market, underpinned by years of inadequate new-build supply. After some price falls over the quieter summer period, the national average is now less than a couple of thousand pounds shy of its all-time high recorded in June.”
In the full month of September sales agreed have recovered after the summer lull and are now down just 4% nationally compared to the same period in 2015, but up 6% on 2014. Given that the housing market in the second half of 2015 was buoyed by the surprise of a majority government, overall sales activity seems to be recovering well after an especially quiet summer in some southern parts of the country. An element of this was due to transaction levels being front loaded into first half of this year due to the tax inspired buy-to-let surge.
Sellers’ market in the northern regions
The six northern regions (North West, North East, Yorkshire & the Humber, East Midlands, West Midlands and Wales) saw an 11% fall in the total available stock for sale compared to the same period in 2015, continuing the downward trend over the last few years. This reduction in choice for buyers hampers their ability to negotiate and gives sellers the confidence to both ask for higher prices and hold out for their asking price. The number of sales agreed have risen by 3% in these regions compared to the same period a year ago.
Shipside observes: “While the number of new-to-the-market sellers is actually up compared to this time last year in all the northern regions, it is failing to keep pace with high buyer demand. Agents report brisk sales in many areas, especially in the mass-market sectors. They say as long as it’s not over-priced, the right house in the right area is quickly being snapped up for close to, at, or even over the asking price.”
Buyers hold the upper hand in much of the south
In contrast, September’s figures for the four southern regions (Greater London, South East, East of England and South West) saw total available stock for sale rise by 16% compared to the same period in 2015. While sales have picked up after the summer months, the number of sales agreed is down across all four southern regions, indicative of less buyer activity than in September 2015. The average across all four regions is a fall in sales agreed of 10%.
Shipside concludes: “This increase in the number of properties up for sale should not be misinterpreted as a glut of unsold property, but rather as an increase from the very low number of properties that agents have had on their books in the last few fast-selling years. While there is still underlying high demand in mass-market sectors, some find that affordability has become over-stretched while others judge that prices have risen beyond their true value. While many properties are still selling, in market sectors where there is now a lot more choice, buyers need enticing by an attractive price or by properties with special finish or appeal. If sellers fail to take this into account, then buyers will choose to buy elsewhere or bide their time.”
London now England’s second slowest-rising region
- The price of property coming to market in Greater London has increased by just 2.5% (+£15,783) in the last year, the second lowest performance out of the nine regions of England
- Only the North East is below the capital with a fall of 1.2%, while London trails in the wake of the next highest region of Yorkshire & the Humber, up 3%
- The annual increase is recorded in spite of a monthly rise of 2.4% (+£14,859), influenced by sellers of more expensive homes putting their properties onto the market this autumn
Breakdown by London Boroughs
National Report, 2015
London Report, 2015