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: 26 March 2018 - 1.23pm

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?

Monthly house prices are unchanged (0%), while the average annual rate of house price growth slows to 2.1% (the lowest it has been since July 2013).  

The major indices report the following shifts in house prices over the past month:

  • Rightmove (0.8%), Halifax (0.4%), and LSL (0.2%) report a rise in house prices;
  • Nationwide (-0.3%) and Land Registry (-0.3%) report a fall in house prices.

Land Registry and LSL reflects January house price data, while other indices reflect February figures.

Buyer enquiries and seller instructions remain subdued

Buyer demand and new seller instructions continue to soften. New buyer enquiries fall for the eleventh month in a row. The average number of homes available for sale on estate agent books hits a record low. Average speed of sale data also suggests it is taking longer for properties to sell. (Source: RICS residential market survey)

However, home sales rise in January

UK home sales increased 1.3% between December 2017 and January 2018.  Transactions are similar to those of a year ago – 0.1% lower than January 2017. (Source: HMRC seasonally adjusted figures)

Mortgage approvals for house purchases are also up in January

Mortgage approvals are a leading indicator of completed house sales. After a slow close to 2017, mortgage approvals recovered ground in January, up 9.4% month on month. However, mortgage approvals were 2.4% lower than January last year. (Source: Bank of England seasonally adjusted figures)

What’s happening in your area?

In the past month, house prices have risen in the South West (1.4%), London (1.0%) and the South East (0.2%) and fallen in all other parts of the country.

Regions with the fastest rates of annual house price growth include the East Midlands (7.3%) and the South West (6.9%).

The North East (0.7%) and London (2.1%) have the slowest rates of annual house price growth.

The Homeowners Alliance said: “Whilst there has been a rise in market activity over the past month, buyer and seller enquiries remain soft and the subdued market looks set to continue. The lack of properties on the market is likely to provide ongoing support for house prices in the months ahead.”

House price watch up down (image: Homeowners Alliance)

What the indices say

Halifax 

“Despite the November rise in the Bank of England Base Rate, mortgage rates continue to stay low by historical standards. While we expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months.”

Rightmove  

“The political and economic uncertainty is out of seller’s control, but they are in control of their asking prices, and in general they are not being overly ambitious or setting too high an asking price. This month’s rise of 0.8% is well below the 1.6% monthly average at this time of year over the last ten years, and it is wise for sellers to be cautious and not to over-price given stretched buyer affordability.”

RICS

“There is little change reported in headline prices. The indicators for future activity in the UK housing market remain subdued. New buyer enquiries, new instructions and newly agreed sales drift lower in February. There continue to be significant regional variations with new buyer enquiries up in Scotland, Northern Ireland, Yorkshire & Humber and down in London, the South East and the East Midlands. Alongside concerns about affordability in some areas of the country, part of the problem may lie in the lack of choice of properties to purchase.”

This article is updated monthly using exclusive Homeowners Alliance data.

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