Prices wilt but marketing times remain below re-Covid figures
Rising borrowing costs are putting the squeeze on asking prices, according to Home.co.uk’s Asking Price Index for September.
Home values slipped for the second consecutive month albeit not as sudden and profound as the drop seen in December 2022. Supply and demand are rebalancing in an orderly manner, with little or no panic-selling and no buyers’ strike.
Residual demand and a strong rental market mean the market is not stagnating but marketing times are significantly higher than a year ago, during the final months of the post-Covid boom. However, the market retains sufficient momentum to indicate that the Typical Time on Market for England and Wales is significantly lower than in either 2018 or 2019.
Stock levels of unsold property have risen overall but remain within the normal range for the seven years prior to the lockdowns. It remains to be seen whether unsold stock totals continue to rise later in the year although, given the low supply of new instructions and the relative strength of the rental sector, an overabundance scenario would appear unlikely in the short term.
Prices did not fall in all regions last month. The North East and Yorkshire both posted modest rises while Scotland added a whopping 1.4% to the mix-adjusted average. The northern regions, Wales and Scotland all continue to show the best price performance and elevated momentum (more than in pre-Covid years), thanks to considerable residual demand.
Rents continue their rapid rise in most English regions, Scotland and Wales, although there are signs of slight cooling in the Welsh and London markets. Overall, the mix-adjusted average annualised rise for the UK stands at 11.0%, while rent inflation in the North West now leads the regional growth table at 15.6%.
The annualised mix-adjusted average asking price growth across England and Wales remains at -1.8%; in September 2022, the annualised rate of increase of home prices was 4.6%.
Headlines
- Asking prices across England and Wales have slipped a further 0.4% since last month, although the year-on-year fall remains just -1.8%.
- The Typical Time on Market for unsold property in England and Wales increased by four days during August, which is consistent with seasonal expectations again. The current median is 84 days; in September 2019 the same measure was 96 days.
- The total sales stock count for England and Wales continues to rise but as yet remains below the total for September 2019. The current total of unsold property is 456,548.
- Prices fell in most English regions and Wales since last month, but rose in the North East, Yorkshire and Scotland, confirming the continued strength of these northern markets.
- Most notably, the supply rate of new instructions entering the market remains restrained: down 4% vs. August 2022 and down 10% vs. August 2018. No increases at the regional level were observed.
- The Scottish property market remains the leader in terms of annualised price growth (5.7%), while falls in the East of England amount to -3.4%, making it the hardest hit English region.
- Rents across the UK continue to rise overall (11.0% annualised) and are now led by the North West (up 15.6%). Small increases in supply are observable but this is from a very low base in most regions.
- The current rent growth leaders in London asking rents are still the boroughs of Bexley and Hillingdon (+35% and +27% annualised respectively).
