Changes in Average House Prices
Source: UK House Price Index - Latest data September 2017
Average sale prices in England & Wales once again rose to their highest level ever, reaching £238,537, up 5.7% on September 2016. However, year-on-year annual average house price growth is slowing: August 2016 saw an increase of 6.5%.
London's prices on the other hand showed a continuing month-on-month fall of 0.2% to £483,568, however they were up 2.5% year-on-year. Once again the annual increase for 2016/17 was less than for 2015/16 when it was 7.3%
The rate at which average house prices are increasing is continuing to slow and accompanies a continuing fall in sales volumes.
Regional Differences in Average House Price Year-on-Year
Source: UK House Price Index - Compare Sep 2017 to Sep 2016- London - £483,568 - Increase of 2.5%
- South East - £324,465 - Increase of 5.5%
- South West - £252,737 - Increase of 6.6%
- East Midlands - £184,399 - Increase of 6.4%
- West Midlands - £189,038 - Increase of 5.7%
- Wales - £152,661 - Increase of 5.3%
- East of England - £289,301 - Increase of 5.9%
- North East - £130,271 - Increase of 4.4%
- North West - £160,951 - Increase of 7.3%
- Yorks and Humber - £158,884 - Increase of 5.6%
Changes in Sales Volumes
Source: UK House Price Index - Latest data July 2017
You can see why Mr Hammond needs to take drastic housing market measures. Sales volumes in England & Wales (including London), as noted previously, continue to decline in the wake of the the change to the stamp duty rules for second home purchases, with the exception of a small resurgence in April 2017.
The latest data for England & Wales shows another annual fall of 16.8% to 68,191 sales for July 2017. This is the lowest activity for July since 2012 (59,448).
Regional Differences in Sales Volumes Year-on-Year
Source: UK House Price Index - Compare July 2017 to July 2016 Latest data available- London - 6,639 - Decrease of 24.5%
- South East - 11,722 - Decrease of 17.0%
- South West - 7,957 - Decrease of 14.8%
- East Midlands - 6,033 - Decrease of 15.0%
- West Midlands - 6,481 - Decrease of 13.6%
- Wales - 3,599 - Decrease of 11.3%
- East of England - 7,636 - Decrease of 20.5%
- North East - 2,861 - Decrease of 18.5%
- North West - 8,639 - Decrease of 17.1%
- Yorks and Humber - 6,624 - Decrease of 11.9%
London - worst ever July since records began
London's story continues to be one of declining sales volumes: there were only 6,639 sales in July 2017 (down 24.5% on July 2016): this is the worst July volumes figure for the capital ever recorded (the Land Registry started recording monthly sales volumes in January 1995).
The proportion of people aged 25-34 who own their own homes fell from 59% to 37% between 2004 and 2015
Source: English Housing Survey
Remortgages: "New All-Time High"
We've referred to the phenomenon of ever-increasing remortgage figures in previous months' housing market updates and data from one large UK mortgage brokerage gave further evidence of this trend.
Remortgages now apparently count for 39% of all mortgages, according to the brokerage, and the market share is rising 10% year-on-year.
Most experts continue to explain this absolute and relative growth as being caused primarily by homeowners choosing to stay put and reinvest in their properties, such as creating extensions, loft conversions and doing general refurbishment work.
Reinvestment becomes even more attractive compared to moving home when house prices continue to stay high accompanied by the costs of relocating. Additionally, the number of remortgage products is rising, fuelling its own demand within the market, and the prospect of further rate rises adds even more fuel to the fire.
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First Time Buyer Sales Hit 'Eight Month Low'
The National Association of Estate Agents' headline in its latest housing report, for October, stated that the percentage of sales to first time buyers in the month fell to its lowest level since February (22%).
The NAEA's figures also stated an 11% month-on-month drop in demand alongside a marginal increase in the number of properties available. The number of sales agreed remained the same (8 per member branch).
Marginal rebalancing of asking prices data
According to the NAEA, one trend which showed a moderate reversal compared to its prevailing direction in many months was asking prices.
Properties selling for more than the original asking price increased for the first time since July, to 4% per cent. This was also accompanied by a 4% month-on-month drop in the number of homes which sold for less than asking price, from 82% to 78%.
Chief Executive of the NAEA Mark Hayward said:
"First-time buyers have felt locked out of the market for some time and our figures continue to highlight how the problem is only getting worse. However, following the announcement of the abolishment of stamp duty for first-time buyers in last week’s Autumn Budget, we hope to see more first-time buyers coming to the market and making their dream a reality.
""We do however need to realise that if we don’t have the supply to meet the increased demand from FTBs it’s likely we’ll see house prices increase."
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