Prices surge as properties ‘fly off the shelves’
Positive trends in all the key indicators underline the fact that the UK property sales market has recovered from the interest rate shocks and is proceeding apace, according to Home.co.uk’s Asking Price Index for April.
Properties are moving through the market more rapidly overall than was observed in pre-Covid years. Confidence has risen significantly following the rebalancing of supply and demand, as demonstrated by a return to modest year-on-year price growth overall.
While price growth is to be expected during spring, the size of the price rises in several regions surpasses the norm. Confident vendors in the South West and Yorkshire hiked prices so much during the last month that the mix-adjusted average rose by 1.7% and 1.6% respectively.
Moreover, they are not alone, as the North East, Wales, and West Midlands also show month-on-month price hikes above 1%. Such rapid price hikes may not be entirely justified by current demand, although given the fact that Typical Time on Market for unsold property is now lower than it was in April 2019, there is some cause for confident pricing.
Positive market sentiment has triggered a rise in new instructions. The total of new market entrants during the last month is 12% higher than a year ago, affording greater choice for buyers. Demand is also increasing as previously hesitant homebuyers return, comforted by price stability and the probable end to rising interest rates. As we stated last month, pent-up demand will be a key driver of pricing this year.
The North/South divide persists in terms of price growth. Northern regions are steadily adding to their already positive annualised growth figures while the South is slowly recovering ground lost over the last twelve months.
The East of England, East Midlands and the South West are still in negative territory but, notably, London just managed to return to positive year-on-year growth this month by the smallest of margins.
Asking rents continue to show positive annualised growth in all regions except Greater London and, perhaps surprisingly, Wales. Asking rents continue to indicate year-on-year losses in the UK’s largest rental market, although a spring boost has lessened the loss to -4.8% from last month’s mix-adjusted average which was -6.9% year-on-year.
Wales slipped into negative territory this month (-0.1%) despite supply being relatively steady. Meanwhile, the North East remains the regional growth leader with a year-on-year rise of 17.1% in the average rent and is the only region apart from Scotland to show a contraction in supply.
UK asking rents are currently 2.8% above their April 2023 reading.
The annualised mix-adjusted average asking price growth (sales) across England and Wales is now 0.8%; in April 2023, the annualised rate of increase of home prices was -0.3%.
