PROPERTY PRICE UPDATE: Don’t believe the scaremongering headlines
Kate Faulkner warns buyers not to be put off when it comes to scaremongering headlines in the mainstream media about property price rises.
Here we go again – with the latest forecasts being published for the property market, the scaremongering headlines about property price rises are being fed to consumers. Apparently, according to the Daily Mail, the rises will lead to people paying ‘£84,000’ more for a home.
Well, if there is anything to put off a first-time buyer saving or someone trading up or down, then that’s a very good reason – the main problem, of course, is that this increase is an average that won’t apply to many buyers and sellers, but may well put people off buying or even selling.
The problem with the information provided is that it only looks at property price rises going forward over a short period of time, not the long-term trend. The Home.co.uk chart shows below that property prices have failed to keep up with inflation since 2021 and real property price growth has been negative.
In fact, according to Home.co.uk:
“Comparing regional growth to CPI (24.5% over the last five years) suggests that only the three northern regions, Scotland and Wales have made small real gains.”
As a result, the reality is, if prices rise as forecast, they will actually be ‘catching up’ with inflation – which they tend to track over time.
According to Land Registry data, on average, prices rise around 3% per annum in most areas and have done back as far as 2005. So the real headline is ‘prices continue to keep pace with inflation’ – but I suppose that doesn’t sell newspapers or secure clicks online!
And, to back this up further, data for this year in our Property Price Index table shows that they have been fairly stable – not just in the last three months, but going as far back as April this year.
So all in all, data on property prices from the current, past and future forecast all suggest it’s still a pretty good time for people to buy and sell.
Of course, it will be different for different properties in different areas and that’s why it’s so important buyers and sellers base their property decisions on local information rather than national data which can, unfortunately, reduce buyer and seller activity.
Property price and market indices headlines
Rightmove – Strong activity but muted Autumn price bounce as buyer choice builds
“Average new seller asking prices rise by just 0.3% (+£1,199) this month to £371,958. This is much lower than the average seasonal 1.3% monthly increase at this time of year.”
Home.co.uk – Vendor confidence rises despite inventory at ten-year high
“Asking prices increased by 0.3% during the last month across England and Wales, supported by growing market confidence.”
Nationwide – Annual house price growth slows in October
“UK house prices rose 0.1% month on month in October.”
Halifax – Average house price edges up to hit record high
“House prices increased by +0.2% in October, a fourth consecutive monthly increase.”
e.surv – Short-term picture improves
“The average sale price of a home in England and Wales in October edged up to £354,800 –about £600 or 0.2% higher than in September.”
Zoopla – UK house price inflation increases to +1%, up from -0.9% a year ago
“House price inflation is being kept in check by a large supply of homes for sale and ongoing affordability constraints.”
Insights from this month’s indices
Market activity remains strong, but the muted Autumn price increase comes as buyer choice and seller competition rise:
– The number of sales being agreed is up by 29% year-on-year, a strong rebound from the weaker market a year ago.
– The number of people contacting agents about homes for sale up by 17% compared with this time last year.
– The number of available homes for sale is 12% higher than a year ago – and the highest per estate agent since 2014.
– Competition for buyers is particularly intense at the top-end of the market, where the number of four-bedroom detached houses and five-bedroom-plus homes available for sale is 17% ahead of last year.
– After two years of cautious recovery, the mix-adjusted [price] average is now higher than in October 2022 but has yet to return to the peak of July 2022.
– The total number of new instructions entering the market during September 2024 was 4% more than during September 2023 and 12% more than September 2019.
– The number of mortgage approvals approaching the levels seen pre-pandemic
– Typical property now costs £293,999, surpassing previous peak set in June 2022.
– Northern Ireland continues to record the strongest annual house price growth in the UK.
– On an annual basis, average prices in October remain about 3.4% lower than a year ago. This is a slight improvement on September, but still not materially different from where we began the year.
– Prices continue to be about £24,000 (more than 6%) below the previous peak reached in late 2022.
First-time buyers are the largest buyer group in 2024 (36% of sales).”
– Sales activity running at the highest level since the 2020 boom.
– Pipeline of sales agreed is 30% higher than a year ago, at £113bn.
– High supply of homes for sale and affordability pressures keeping house price inflation in check.
– First-time buyers are the largest buyer group in 2024 (36% of sales).
– The dynamics of renting and buying have shifted, supporting purchases by first-time buyers.
– A reversal of stamp duty land tax changes in the Budget could see 20% more FTBs paying this tax in England and N. Ireland.
