Prices leap as the market surges
The post-lockdown restart of the property market is proceeding with considerable aplomb, according to Home.co.uk’s Asking Price Index for July.
- The mix-adjusted average asking price for England and Wales jumps 1.5% since the June reading, bringing the year-on-year rise to 2.0%.
- Supply of new sales instructions returns to near-normal levels in England in May post-lockdown (but not in Scotland and Wales).
- Vendors’ upward pricing indicates heightened confidence despite lending restrictions in the first-time buyer mortgage market and rising unemployment.
- Yorkshire shows extraordinary confidence with a hike in the average home price of 2.7% since last month.
- The supply rate of new instructions has completely recovered in London (+4% year-on-year), but supply remains 65% down in Scotland due to longer lockdown conditions.
- The best-performing regions are the North West and Yorkshire, both showing year-on-year price growth comfortably surpassing that of monetary inflation (5.1% and 5.5% respectively).
- The total sales stock on the market across England and Wales again shows a small month-on-month gain but remains significantly down year-on-year by 12%.
- Despite a very confident rise of 1.6% this month, the East of England remains the UK’s worst-performing region with the year-on-year change in average asking price just in the red at -0.4%.
- 33% less properties were reduced in price last month compared to June 2019.
- Supply in the rental sector across the UK continues to recover but remains 6.2% down year-on-year.
Home sellers continue to reboot the supply side with very confident pricing. Overall, the number of new instructions in the UK during June was just 9% shy of the figure for June 2019 and Greater London vendors added 4% more stock than a year ago. This month’s hike in the national average price of 1.5% is the largest monthly rise since February 2014, such is the current bullishness of sellers who will no doubt be further encouraged by the stamp duty holiday.
Confidence appears greatest in the North West and Yorkshire, where extraordinary month-on-month price hikes of 1.9% and 2.7% respectively confirm that considerable strength remains in these formerly hot markets. Overall, it would appear that all the English regions, Scotland and Wales are making up for lost time as indicated by month-on-month hikes across the board in excess of 1.0%.
While supply is returning to anticipated levels, the overall stock of properties on the market remains low: total inventory is 12% less than in July last year. On the other hand, demand, as judged by a surge in the number of mortgage applications in June (1) and a report of the best four weeks of trading in 2020 (even surpassing the same period in 2019) by a major estate agent, (2) appears to have the upper hand and this is driving up prices.
The annualised mix-adjusted average price growth across England and Wales currently stands at +2.0%; in July 2019, the annualised rate of increase of home prices was -0.4%.
(1) Halifax report (2) Andrews Property Group