House Price Index

September 2019

Autumn opportunity for ‘keep your nerve’ buyers as uncertainty bites again

  • The price of property coming to market falls by 0.2% (-£730) this month, the first fall at this time of year since 2010
  • No sign of autumn bounce yet, with signs that heightened political uncertainty is causing some to hesitate, giving a better negotiating opportunity to autumn buyers who can keep their nerve:
    • Number of sales agreed is down in all regions compared to a year ago, with the 5.5% drop a marked reversal from the +6.1% sales agreed flurry that we reported a month ago
    • Number of properties coming to market is down by 7.8% this month compared to the same period a year ago, again with all regions down on the prior year
    • Annual rate of price increase drops to just 0.2%, buoyed by the north and dragged down by parts of the south

Overview

The average price of property coming to market falls by 0.2% (-£730) this month. September is usually the start of an autumn bounce in housing market activity, yet this is the first price fall recorded at this time of year since September 2010, with rises recorded every year for the last eight years. While the underlying housing market fundamentals remain sound, uncertainty is causing some to hesitate and this heightens as we get closer to a Brexit deadline. However, this also gives autumn buyers who keep their nerve a better negotiating opportunity.

Miles Shipside, Rightmove director and housing market analyst comments: “Many have got used to living in the jaws of uncertainty since the referendum over three years ago, and have been getting on with their lives and housing moves. However, as we approach yet another Brexit deadline, there are signs that the increasing gnashing of teeth is causing some to hesitate. The autumn bounce normally kicks off at the same time as kids go back to school, but this year it’s a late starter at best, and if uncertainty persists then the autumn term could be missed altogether and its activities be delayed until the new year. Those who are planning to buy or trade up and can keep their nerve whilst others hesitate may find that they are in a stronger negotiating position to get a favourable deal.”

The number of sales agreed is down this month in all regions compared to the same period a year ago, indicating that this is widespread hesitation rather than being restricted to some geographic areas. The 5.5% national drop is a marked contrast and large turnaround to the +6.1% sales agreed flurry that we reported a month ago. This is only a monthly snapshot, however, and a look year-to-date figure shows that the average sales agreed numbers are only down by 3.4% on a year ago.

Shipside observes: “In August we reported a pre-Brexit buying spree with the number of sales agreed up by over 6% compared to the prior year, as buyers and sellers decided to get deals secured well before the next Brexit deadline.  A month later, as the deadline gets closer and tensions heighten, there has been a big swing the other way with sales agreed numbers now over 5% below those of a year ago. Buying activity is still at nearly 95% of what it was a year ago, but sellers in all regions are seeing fewer sales go through, so should be more willing to negotiate with prospective buyers if they want or need to get a deal done.”

Fewer property owners seem to have the need or desire to put their property on the market, again likely to be influenced by the backdrop of increased uncertainty as well as lack of suitable choice of properties for them to buy. The number of newly-marketed properties is down by 7.8% this month compared to the same period a year ago, again with all regions down on the prior year. This is influenced by what’s happening in London, where there is a drop of more than 20% in new properties coming to market as some owners await a Brexit outcome and market recovery.

Shipside notes: “All regions are down on their numbers for both sales agreed and properties coming to market. Some regions are just marginally behind the previous year, but they are all seeing less activity in these two key metrics, showing that hesitation is now more widespread rather than being localised to  just some parts. However, some of that will be due to difficulty in finding the right property to buy, as activity still remains brisk in some locations, evidenced by continuing upwards pricing pressure in some parts of Great Britain. Uncertainty is clearly not just about the political situation, with finding the right property to buy being a bigger worry for many.”

While the average annual rate of price increases drops to just 0.2%, this is buoyed by the north and dragged down by parts of the south. London has properties now coming to the market at an average of 2.1% cheaper than a year ago, with the South East region also in negative territory at -1.1%. All other regions have new seller asking prices up compared to a year ago, with the North West being the most buoyant at +3.5%.

Shipside adds: “There’s obviously some year-on-year bounce occurring in prices in the North West, and also in the North East, Yorkshire & the Humber and Wales, which all have new sellers asking at least 3% more than at this time last year. Buyer affordability and investor activity create and maintain market momentum, but these factors are lacking in parts of the south.”

Regional Trends

National Trends

                                          

London Trends

Lower prices help speed up time to secure a buyer

  • The price of property coming to market falls by 2.2% (-£13,353) in London this month, the first fall at this time of year since September 2010
  • Whilst all market sectors have seen price falls, the main driver is the 6.4% drop in the “top of the ladder” sector (five-bed properties and above, as well as four-bed detached houses)
  • With over 20% fewer properties coming to market in all sectors – as owners await a Brexit outcome and market recovery – the monthly figures are prone to volatility
  • Despite the fall in prices and market activity, the average time taken to find a buyer has decreased from 72 days at this time last year to 69 days now, suggesting that lower prices and improved affordability are helping some properties to sell more quickly

The price of property coming to market falls by 2.2% (-£13,353) in London this month, the first fall at this time of year since September 2010.  Cheaper prices are helping to reduce the overall average time taken to secure a buyer, falling from 72 days at this time last year to 69 days now. The last time that we saw a year-on-year fall in the average time to secure a buyer for property in London was in June 2016, the month of the Brexit referendum. However, the “top of the ladder” sector is bucking this improving trend, with an increase from 87 days to 90 days, indicating that market conditions are still challenging for these high-end sellers. The lack of property coming to market leads to smaller sample sizes, which in turn can cause higher levels of monthly volatility in market sectors where there were already fewer properties. We are seeing that this month in the “top of the ladder” sector, which is showing a 6.4% price drop.

Miles Shipside, Rightmove director and housing market analyst comments: “There are over 20% fewer properties coming to market in all market sectors compared to a year ago, including the “top of the ladder” sector where numbers were already relatively low. Owners seem to be holding back awaiting either a more certain Brexit outcome or a market recovery –  and perhaps both? This shows that the top-end sector is still struggling most, with an annual decrease of 2.6% compared to London’s overall fall of 2.1%. The high average price and smaller numbers mean that the monthly figures are prone to volatility, with the annual rate being a better long-term indicator of market trends.”

We have reported on the twists and turns of the London market over the past few years, and noted that they are likely to continue despite some signs of the market bottoming out. There has been an improvement in the time taken to secure a buyer, but another marked slowdown in average asking prices in London, likely as a result of Brexit’s own twists and turns.

Shipside adds: “Many have got used to living in the jaws of uncertainty since the referendum over three years ago, and have been getting on with their lives and housing moves. However, as we approach yet another Brexit deadline, there are signs that the increasing gnashing of teeth is causing some to hesitate. Those who are planning to buy or trade up this autumn and can keep their nerve whilst others hesitate may find that they are in a stronger negotiating position to get a favourable deal.”

*Borough data is based on a three month rolling average and can be used as an indicator of overall price trends in each borough over time. It is not directly comparable with the overall London monthly figures.

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