Compared with the booming conditions of a year ago, this signals a return to a healthier, less inflationary environment.
This month, asking prices have risen by 0.3% - with no significant seasonal downturn seen so far (Rightmove does not adjust its data seasonally so that if price falls occur over the Christmas/New Year period they are reported rather than being ‘smoothed out’ as occurs with other house price indices).
Miles Shipside, commercial director of Rightmove, comments: “After the heady boom of the past 18 months, it comes as something of a relief to see the market return to more stable conditions. Contrary to some speculation that we would see house prices tumble, the market is looking steady and resilient.”
2003 Annual house price inflation
The housing market has entered its pre-Christmas lull, with limited buyer activity and few new instructions. However, stock levels of properties for sale remain at historically low levels. Miles Shipside explains: “At the moment, the shortage of supply is not a major problem, but our member agents will be looking for plenty of new instructions after the holiday period so that as and when buyer activity picks up, there will be a good choice of properties to purchase.”
“While you may think that the housing market is not on people’s minds while they are with their families over the festive period, in fact many people decide to move house over the Christmas pudding or make finding a bigger home their New Year’s resolution.”
Rightmove’s Market Indicator shows properties coming off the market continuing to outstrip those coming on, but this month there is a reversal of the growth in the imbalance – for the first time in 6 months – suggesting that stock levels may be about to pick up.
Time on Market for the whole country rose slightly this month from 66 days to 68 days, about 11 days longer than in late spring this year. On the other hand, Greater London has seen properties coming off the market more quickly, falling steadily from the summer peak of 78 days to 66 days now. Time on market is now shorter in the capital than in the country overall, the first time this has occurred since late summer/early autumn 2002.
While properties are coming off the market more quickly in Greater London than has occurred for some months, asking prices continue to be quite volatile, with a 2.7% fall this month, following rises over the past 2 months. Average asking prices are now £258,571, 0.2% or £430 down on the figure of £259,001 12 months ago.
Miles Shipside says: “London is the only part of the country where house prices have not seen significant rises over the year, but across the capital the year is ending with average asking prices virtually flat. However, this does mask quite big rises in some boroughs and falls in others. The principal losers have been higher priced, fashionable inner-London boroughs where there has been a significant price correction. On the other hand, these were the areas where prices had risen most during the boom, so it only takes prices back to where they were 18 months or 2 years ago.”
Regionally, northern parts of the country, plus the South East, saw rising prices this month: the East Midlands were up 3.7%, Yorkshire & Humberside up 2.1%, the North West and South East both up 0.4%, and the North up 0.3%. Asking price falls were recorded in other southern and western regions, with Wales down 3.2%, Greater London and East Anglia both down 2.7%, the South West down 2.3%, and West Midlands down 0.3%.
Annually, 2003 saw the strong house price inflation in the North (20.6%), Wales (20.0%), the North West (19.4%), Yorkshire & Humberside (18.6%), and the West Midlands (15.2%). On the other hand, lower, single-digit rates of inflation were seen in the South West (9.4%), East Anglia (8.0%) and the South East (5.1%).
Miles Shipside concludes: “The rate of house price inflation has varied a lot in different parts of the country, but what is clear is that – apart from in some pockets of London – the vast majority of people’s homes have appreciated in value this year. In fact, some properties have gone up in value by 25% or 30%. Now we’re seeing the market in a cooler, calmer condition, and with borrowing rates still very low and consumer confidence pretty sound, I’m expecting a sound start to 2004.”