The downturn steepens as we enter 2019. Prices continue to fall in London, the South East and East of England. In fact, the rate at which prices are correcting in these regions is increasing.
London’s losses over the last twelve months have now extended to 3.2% or around £17,000 for the average property. Further erosion of asking prices in the South East and the East has now precipitated losses of 1.9% and 0.8% respectively.
The South West has become the next domino to fall as the price correcting phase of the property cycle sweeps west and north, out from London. Joining England’s three most populous and expensive regions (Greater London, the South East and the East of England), the South West is now the fourth region where growth has become year-on-year negative. Together these four regions account for around half of the UK’s dwellings. Going forward, their combined effect on the national average growth figures will be adverse.
However, significant market vigour is still apparent in some regions and support for headline growth is nowhere more prevalent than in Wales and the West Midlands where asking prices are 5.7% and 5.1% higher than they were a year ago. Regions further north also show solid growth. The North West and Yorkshire have pushed up their average asking prices by 4.5% and 4.1% respectively since January 2018.
Price growth in the East Midlands stalled in early summer last year and the market is slowing, as evidenced by the typical Time on Market increasing. Supply in the region is currently up 5% and we expect this to increase further over the coming months as investors attempt to cash out. This would be consistent with market behaviour observed previously when the East and South East markets peaked.
Overall, supply of property for sale in the UK is up by 3% YoY and the total stock for sale has increased by 11.4%.
In January 2018, the annualised rate of increase of home prices was 2.7%; today the same measure is just 0.2% and continues to trend towards the negative.