Conflicting reports cause confusion for buyers and sellers

Latest Property Price Summary
We track most of the monthly reports on property prices produced on a monthly basis. This report summarises what’s being said about the market and includes Kate Faulkner’s comments on what this means for the industry, the market and consumers.

Report Headlines:-
Rightmove – “Seller shortage helps push asking prices up 6.9% so far in 2013”
Hometrack – “House prices post largest monthly increase for three years”
Nationwide – “UK house prices unchanged in March”
RICS – “Prices flat although transactions rising”
Acadametrics – “House prices up £6,700 in the past year”
Land Registry – “The February data shows a monthly price increase of 0.2 per cent”

Kate Faulkner comments:
“As ever, the property price indices suggest different market performances, mainly due to the time they measure the market. It looks like sellers feel house prices are on the rise, so are putting property prices up which is being maintained at offer level. However, by the time lenders and surveyors are valuing, prices appear to remain pretty flat. However, this is very much at a national level and regional prices vary considerably.”

New Home Property Prices
Smart New Homes – “The average price of a new home was £224,264 in February, compared to £232,022 in January. This represents a fall of -3.3% month-on-month. Annual growth stood a -2.2% in February, the first fall recorded since September 2011. Annual price growth has continued to drop back from a high of 7.9% achieved in September last year. House builders are pricing to sell, with new homes now costing on average £11,477 less than in the wider market.”

Kate Faulkner comments:
“New homes have consistently held their value since 2008/9 but it looks like increased building levels are helping to keep property prices competitive.”

Regional Property Price Differences
Rightmove – “All regions have seen prices rise month-on-month except London, though this should be put into the context of prices in the capital outpacing the rest of the country over the last 12 months.”

Hometrack – “Pricing levels have been improving across the country. House prices were down in only one region – the North East – compared to January and February of this year, when prices were lower in four and three regions respectively. The strongest house price growth outside London was seen in the South East and East Anglia.”

RICS – “At the regional level, in terms of current prices, the London market remains the standout performer, with surveyors seeing more modest price gains in the South East. Elsewhere, surveyors are less negative about prices this month, with Wales, the South West and the Midlands all recording flat or slightly negative price balances. Outside England & Wales, Scotland has seen less severe price falls in 2013 compared to last year, while Northern Ireland saw its first positive price net balance since July 2007.”

Acadametrics – “Greater London continues to dominate the housing market in terms of annual price change, with house price inflation over twice that of any other region of England & Wales. For the second month running, East Anglia takes second place and joins Greater London in being one of the only two regions in the country with annual price increases higher than the average for England & Wales as a whole. The region with the largest fall in annual house prices is the North, down 1.0% over the year, marginally below Yorkshire & Humberside where prices have fallen by 0.9%. This month we have five regions showing an increase in the annual price change compared to last month, and five regions showing a decrease in the rate of change.”

Land Registry – “The region with the most significant annual price increase is London with a movement of 6.3 per cent. The region with the greatest annual price fall is Yorkshire & The Humber with a movement of -0.9 per cent. Wales experienced the greatest monthly price rise with a movement of 3.6 per cent. The South West saw the most significant monthly price fall with a movement of -0.8 per cent.”

Smart New Homes – “Prices in the capital remain steadfast, with Greater London witnessing the biggest monthly price rise in February of 3.0%. The region also recorded strong growth of 7.2% over the quarter and 6.6% annually. At the other end of the scale, the West Midlands saw prices dip -0.1% in February and -1.7% and -3.9% over three and 12 months respectively.”

Kate Faulkner comments:
“The regional property price figures show a clear divide. Some areas where the economic conditions are improving and there are high levels of equity growth, these are showing good recovery in house prices, such as areas within London. However, other areas where equity levels aren’t so high and the economic performance isn’t so strong, are still struggling to recover from a property price perspective.”

Demand for Property
Rightmove – “With average time on the market down from 83 days in April last year to 73 days this year, there is evidence that growing demand in the market is not being matched by the supply of new properties coming up for sale. Those who are only buying react more quickly to improving market conditions than those contemplating both selling and buying. The resulting mismatch in timing adds to upwards price pressure as more buyers compete for fewer fresh properties.”

Nationwide – “In recent months buyer demand has been supported by healthy rates of employment growth, as well as the Funding for Lending Scheme, which has helped to reduce mortgage costs and increase credit availability.”

Hometrack – “Demand has risen by 19% in the last two months, slightly lower than the same period in 2012 (22.5%). Such is the volatility of the market that in spite of tightening supply, the smallest increase in demand can quickly affect pricing levels.”

RICS -“March saw a pick-up in new buyer enquiries following a subdued start to the year, although instructions remained flat. Transactions also increased, with newly agreed sales rising for the third consecutive month. Indeed, sales per surveyor rose by 3.4% on the month to 17.4, the highest level in three years.”

Land Registry – “In the months September to December 2012, sales volumes averaged 56,886 transactions per month. This is a decrease from the same period a year earlier, when sales volumes averaged 61,392 per month. Over the past 33 months, transaction volumes have been relatively consistent.”

NAEA – “There was a rise in the number of homes sold during the month, moving from an average of 7 sales per branch in January to 8 in February. This followed a surge for demand for property in January when an average of 314 house hunters was registered per branch. In February, this dropped back down to an average of 289 per branch which may suggest that the vast majority of house hunters seeking property in January were successful in securing a purchase.”

Smart New Homes -“Buyer demand dropped back in February after a strong start to the year for the new homes market. The bad weather spell will have dissuaded many from visiting developments and delayed the usual spring surge in activity. We would expect to see a pent up demand from buyers emerging over the next couple of months, supporting price growth.”

CML -“The number of first-time buyers increased by 3% in February, marking the best start to a year since 2008, according to new data released today by the Council of Mortgage Lenders. Activity in the first-time buyer sector was 17% stronger in February than in February last year, and combined with January reached the largest number of first-time buyers in the first two months of the year since 2008.Lending to home movers fell – contributing to an overall dip in house purchase lending – while re-mortgage lending also eased.”

Kate Faulkner comments:
“Demand on the one hand seems to be picking up in 2013, although this has yet to translate into increased sales and mortgage figures from the Land Registry and CML. Monthly figures tend to be quite volatile, so we won’t really know until the summer whether demand is really rising and the funding for lending/help to buy schemes are actually having an impact.”

Supply of Property
Rightmove – “The weekly run-rate of properties coming to market this month, even excluding the abnormally low listings seen during Easter week, was 28,179, down 4% on April last year.”

Nationwide – “Housing supply has remained relatively constrained.”

Hometrack – “A lack of housing for sale underpins the boost to prices. Low growth in the number of new homes coming to the market, rising demand at a seasonally strong time of year, and a jump in sales agreed has led to a depletion in the number of homes for sale which in turn has reinforced scarcity and price rises.”

RICS – “The new instructions balance remained unchanged at +2 and the average stock on surveyors’ books (per branch) edged up from 66.4 to 68.9 during March.”

NAEA – “The average number of properties available for sale per branch increased, with 56 on offer in January compared with 58 in February. Renewed market confidence saw an increase in the average number of properties available, putting an end to a three month decline. Strong demand for property in January encouraged many sellers, more confident of a swift sale, to place their properties on the market.”

Smart New Homes – “The Government has confirmed Help to buy as one of the bedrocks of its housing strategy, extending its support for both in the Budget. This will help to support new homes sales while mortgage availability remains an issue. All eyes are now on the new National Planning Policy Framework that will come into effect next month and we are hopeful this will deliver an increase in the number of homes being built over the next one to two years.”

Kate Faulkner comments:
“The supply of new builds remains pretty low compared to pre credit crunch norms. However, over the next 12-18 months, the billions of pounds the government is pumping into house building must make a difference to stock levels or the one chance they have to improve the economy disappears. From a general stock level perspective, as our population is ageing so people remain in their homes for longer, this is 25 years now, according to Hometrack. This trend continues to restrict the stock levels coming onto the market, while a lack of house price growth means those who would normally be moving 5-7 years on are stuck with properties outside of London which are not worth what they bought when they paid for them.”

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About Kate Faulkner OBE

One of the UK’s leading property experts, commentators and analysts. An author of a number of property books, including four property guides for the consumer organisation Which?. Media appearances include BBC1 Breakfast, ITV/ITN, The One Show, BBC2 Your Money, Radio 4 You and Yours, Radio 5 Live, Channel 4, plus numerous local BBC radio stations.
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1 Response to Conflicting reports cause confusion for buyers and sellers

  1. Pingback: Previous Property Price Reports | Kate Faulkner BSc (Econ) MBA DipM CIM

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