Post-Brexit certainty and shortages boost home prices
The clouds of political uncertainty that haunted the UK property market are clearing and, consequently, confidence is returning, according to February’s Home.co.uk Asking Price Index.
Prices are up in almost all regions and the market is gaining momentum. Whilst an uptick may be anticipated on a seasonal basis, the year-on-year figures show that market conditions are improving over and above expectations.
Ultra-low stock levels remain a key driver in both the sales and rental markets. The total stock of property for sale in England and Wales is now down 10% year-on-year. London is still the worst hit, with 21% less property on the market than a year ago. In parallel, the lettings market has 18% less stock entering the market and London is also suffering the most, with the supply of newly available rental properties down 24%.
Without doubt, supply has slumped below the level of demand in both sectors and this situation has clear implications for significant upward price adjustments in the London sales market and further dramatic rent hikes over the course of 2020.
Overwhelming demand for the few rental properties available is inflating rents across much of Greater London (29 of 34 boroughs showing increases above 2.5%) and our analysis shows that rent hikes continue to spill over into the South East (now up 10.0% year-on-year). Expect this rental trend to continue throughout 2020 and house prices to follow in their wake as yields improve rapidly.
Annualised mix-adjusted average price growth across England and Wales currently stands at +0.9%; in February 2019, the annualised rate of increase of home prices was -0.2%.
