This month there are some very mixed messages coming out of the property market.
On the one hand, Rightmove report record traffic, with 141 million visitors spending 1.1 billion minutes on their website. They also report, in February, average asking prices rose by 0.8%.
On the other hand, if you looked at another highly respected index, the Nationwide’s, you’d see prices fell by 0.3% over the course of February, the first monthly fall since August last year.
It’s only when you dig into the details that the picture becomes a little clearer. Although Rightmove’s asking prices were up by 0.8%, they usually rise a little faster at this time of year. In fact, the ten year average is double that figure at 1.6%. Annual growth is relatively subdued at 1.5% and there are some wide disparities between the regions.
Miles Shipside of Rightmove says,
“The average price of newly-marketed property in the Midlands is up by over 5% compared to a year ago, a marked contrast to parts of London and its commuter belt.”
He then adds,
“Much of the UK still has momentum, with good buyer demand for the right property at the right price, and the recovery in the number of sales agreed is another indicator of pent-up demand keeping the market moving.”
And, although the Nationwide’s figures were down by 0.3% last month, they were up by an unexpected 0.8% the month before. More significantly, their annual growth is at a similar, but slightly higher level to Rightmove’s (1.5%).
Despite that, Robert Gardner, Nationwide’s Chief Economist, is a little less upbeat than his Rightmove counterpart, saying:
“Housing market activity is anticipated to slow only modestly, since unemployment and mortgage interest rates are expected to remain low by historic standards.
“Similarly, the lack of properties on the market is likely to provide ongoing support for house prices. Overall, we expect house prices to be broadly flat, with a marginal gain of around 1% over the course of 2018.”
So, it seems both indices are showing growth is slowing over the long term, but is bouncing up and down on a monthly basis. At the same time, there are some wide regional variations, which are further confusing the picture. For example, anyone trying to sell a house in London, where the slowdown is most pronounced, would hardly recognise what’s happening in the more buoyant Midlands.
These varied conditions are being driven by huge differences in affordability. Over the last ten years, prices in London have grown by 64.5%. Over the same period, in the East Midlands, prices have risen by a far more modest 18.1% and, like many other regions, still have a long way to go to before they catch up (source: Land Registry).