Prices up in all regions as the market picks up pace
Home sellers’ optimism is vastly improved compared to March last year, according to Home.co.uk’s latest Asking Price Index.
With an air of ‘business as usual’ pervading the market, slightly more vendors than usual have committed to sell, although stock levels are still comparable to pre-pandemic levels.
Currently, there is no excess of property on the market that would inevitably put downward pressure on prices.
Moreover, time on market figures (both mean and median) are falling as properties begin to move through the market more quickly. Current Typical Time on Market figures are consistent with pre-Covid years and we anticipate further reductions in marketing times in April and perhaps May.
There is also good news for buyers, with the market offering much more choice and lower pricing (particularly in London, East Midlands, East and the South West) when compared to the peak in July 2022.
Buyers are also increasingly confident that price corrections due to higher interest rates have worked through the market and that future price falls appear less likely in the near term.
Annualised growth in home market values for England and Wales has been notably absent during the last twelve months but growing confidence suggests a return to capital appreciation, albeit small, is likely this year. Therefore, we might expect the southern regions to recover lost ground and join the northern English regions, Wales and Scotland in registering positive year-on-year growth by autumn of this year. Pent-up demand will be a key driver of pricing this year.
Little has changed at the regional level: Typical Time on Market figures continue to indicate that the North of England, Scotland and Wales are all in good health and this enhanced momentum correlates closely with positive annualised price growth in all these regions.
However, Greater London, East and the southern regions do show an improvement in their respective Typical Time on Market compared to 2019, therefore paving the way towards tangible year-on-year price growth. We expect the Midlands to follow suit later in the year.
Asking rents continue to show positive annualised growth in all regions except Greater London and Scotland. Rents continue to fall in the UK’s largest rental market where the mix-adjusted average is now down 6.9% year-on-year. Scotland is suffering a similar fate, with growth falling into negative territory this month (-0.9%), which is also due to oversupply.
Meanwhile, the North East indicates a year-on-year rise of 15.1% and is the only region to show a concomitant contraction in supply.
UK asking rents are currently 2.1% above their March 2023 reading.
The annualised mix-adjusted average asking price growth (sales) across England and Wales is now 0.1%; in March 2023, the annualised rate of increase of home prices was 0.3%.
