House prices: what's really going on in the property market

A look at whats happening to house prices across England and Wales, using exclusive analysis from the Homeowners Alliance campaign group.

Love Money
Last updated:22 February 2018 - 12.23pm

Even a cursory glance at the papers can reveal a lot of conflicting information about the UK property market. 

Depending on which index you go by you could be full of confidence about the direction prices are heading in or filled with a sense of panic.

But before you make any rash decisions based on one figure, how about getting a clearer picture of house price activity by comparing all of them?

The chances are you have more important things to do than trawl through every house price index over the past month so luckily the Homeowner's Homeowners Alliance has done it for you.

The House Price Watch looks at all of the information from the various indices out there to give you one easy to digest round-up of everything you need to know.

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What's happening to house prices?

House prices are up (0.2%) on average in the past month and the average annual rate of house price growth slows to 2.6%.  

Most of the major indices report a rise in house prices over the past month:

  • Rightmove (0.7%), Nationwide (0.6%), Land Registry (0.4%) and LSL (0.2%),  report a rise in house prices;
  • Halifax (-0.6%) reports a fall in house prices.

Land Registry reflects December house price data, while other indices reflect January figures.

Home sales, new buyer enquiries and seller instructions decline

UK home sales decreased 3.9% between November and December 2017. Transactions are 0.1% lower than December 2017 (source: HMRC seasonally adjusted figures)

New instructions to sell declined with average homes available for sale per agent close to historic lows. New buyer enquiries fell marginally but are broadly similar to levels noted in recent months.

Mortgage approvals for house purchases ended the year with a sharp fall

Mortgage approvals, a leading indicator of completed house sales, dropped 5.7% in December to 61,039, the lowest level since January 2015.

Over the year to December 2017, total mortgage approvals were 2% lower than in the same period in 2016 (source: Bank of England seasonally adjusted figures)

What’s happening in your area?

House prices are up in most parts of the country over the past month.

The North East (2.7%), the South West (+1.0%), Wales (+1,0%) and London (+0.8%) experienced the biggest rise in house prices over the past month.

Regions with the fastest rates of annual house price growth include the South West (7.5%) and the West and East Midlands (6.3%).

London (2.5%) and Yorkshire & Humber (2.8%) have the slowest rates of annual house price growth.

The Homeowners Alliance said: The beginning of 2018 sees a continuation of subdued market activity with agreed sales, buyer enquiries and new sales instructions down on the previous month. The lack of properties available for sale is supporting house prices.”

What the indices say

Nationwide  

“Activity has been subdued on both the demand and supply side of the market. The flow of properties coming onto estate agents’ books has been more of a trickle than a torrent for some time now and the lack of supply is likely to be the key factor providing support to house prices.”

Halifax 

“Household finances are still under pressure as consumer prices continue to grow faster than wages. It is still too early to see any impact for first-time buyers from the abolition of Stamp Duty on purchases of up to £300,000 which was announced in the November Budget. 

Despite the recent rise in Bank of England Base Rate, mortgage rates are still very low.  This combined with an ongoing acute shortage of properties for sale will continue to underpin house prices over the coming months.”

Rightmove 

“The average price of property coming to market is similar to the rise at this time a year ago with virtually identical number of properties coming to market.  Buyers are still price-sensitive with sales agreed numbers in the last quarter of 2017 down 5.5% on the same period a year ago. Sellers of properties suitable for first-time buyers are set to have the greatest chance of sales success following last Autumn’s Stamp Duty saving boost.”

RICS 

“Results show the year starting off in a very similar vein to the closing stages of 2017. New buyer enquiries, instructions and sales all continue to drift lower (in net balance terms), while near-term expectations point to a flat outturn for activity in the coming months. Having said that, there is a little more optimism regarding the twelve-month sales outlook which is now at least modestly positive in virtually all parts of the country.”

This article is updated monthly using exclusive Homeowners Alliance data.

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