Northern House prices power up
The slowdown that originated in London has clearly spread to the adjacent regions of the East of England and the South East.
However, there are no indications, so far, that the same malaise is about to overtake other English regions or Wales in 2018. On the contrary, the Midlands and the North are currently enjoying steady price growth whilst falling marketing times show that demand is strong. Unlike the feverish pace of price rises previously observed in London and the Home Counties, the growth observed in the North and Midlands is, for the time being, more moderate and therefore appears more sustainable.
Hence, as we begin 2018, the overall property market dynamic is characterised by a balance between growth in the North and Midlands and the slowly deflating London market. Moreover, we expect the slowdowns to persist in the South East and East of England but their lower growth will be fairly neutral with regard to the national figures. Owing to this ‘push-pull’ dynamic, North & Midlands vs. London, the apparent stagflation in the national growth figures that characterised much of 2017 looks set to persist into 2018.
North of the border, the Scottish property market has cooled rapidly over recent months, showing a 2.0% fall in prices over the last six months. Annualised growth sits at a mere 1.4%, reflecting a similar stagflationary environment with little change in marketing times.
Wales, on the other hand, has shown to be a consistently improving property market over the course of 2017 with the average price rising by 4.3% and this trend looks set to continue into 2018. Marketing times remain high but the current trend is downwards as demand rises.
Through the course of 2018 we will be keeping a keen eye on supply figures, especially in Greater London, as any significant increase in property for sale in the capital will adversely affect the current delicate balance. For the time being supply increases in London and the South East are relatively small, whilst in the North and Midlands supply is slowly tightening.
In Jan 2017 the annualised rate of increase of home prices was 3.1%; today the same measure is 2.7%.