Conflicting UK house price data points to two-tier market
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Version 0 of 1. Are house prices rising or falling? Two national indices published on Monday paint sharply contrasting portraits of the UK property market, adding to erratic data over the past month that has left economists increasingly puzzled. Rightmove said average prices jumped by more than £5,000; Haart said house prices fell in January Rightmove, the biggest property portal in the UK, said average prices listed on its site over the past month jumped by more than £5,000, pushing up the typical asking price of a home by 2.1% to £279,004. It said it enjoyed its busiest month ever, with British home hunters clicking through 1.5bn pages of the site in January alone, while estate agents are finding themselves desperately short of stock. But Haart – part of Spicerhaart, Britain’s largest independent estate agency group – said house prices fell in January, with the biggest declines in London. It added that prices in the capital have now fallen back to where they were a year ago, and that prices in the western suburbs are down by a 10th over the year. Halifax reported that house prices jumped by a robust 2% nationally in January, but the Royal Institution of Chartered Surveyors said last week that the data “continue to signal a cooling market” with confidence among surveyors in short supply. What appears to be emerging is a two-tier market – with London, for once, trailing the rest of the country and distorting the national picture. Rightmove, which has issued the most upbeat assessment of the property market, concedes that the time it takes to sell a property in the capital has risen dramatically. Last summer, when the London market was at its fizziest, Rightmove said it took 40 days to sell a property, but this has risen to 69. Two of London’s wealthiest boroughs, which were at the forefront of prices increases early last year are now reporting year-on-year declines. Houses in Camden were fetching an average of £1,054,000 in February last year but this has fallen to £1,019,500, said Rightmove. In Kensington and Chelsea, prices have been pegged back from an average of more than £2,433,000 to £2,317,000. But north-east England, which for so long has lagged the rest of the country, has experienced the biggest price increases over the past month, said Rightmove. Average prices jumped 6.4% between 15 January and 15 February alone, rising from £135,000 to more than £143,500. Rightmove director Miles Shipside said: “We’re now over a month into 2015, and despite predictions that the upcoming May election could slow home-mover interest, Rightmove has recorded its busiest ever month for traffic and leads to agents. This demand has contributed to new seller asking prices being up across all regions this month, by a national average of over £5,000 (+£5,729/+2.1%). “Decades of inadequate provision of homes to satisfy growth in demand are having an increasing effect, with a tight-stock market resulting in a shortage of quality property for sale to trade up to.” Estate agents are counting on cheap mortgage rates and stock shortages to drive up prices this year. Paul Smith, the chief executive of Haart, said: “Borrowers have never had it so good, as highly competitive mortgages are in abundance with lenders falling over themselves to gain market share. However, pre-election jitters appear to be spooking the market. “While property prices in London are back to January 2014 levels, this window of affordability will be short-lived as a severe stock shortage spreads pre-election. While December’s stamp duty reform has further stoked demand, this has not yet translated into sellers. This means the London market is in stalemate, with plenty of people wanting to buy but a dearth of suitable stock and this will only send prices upward again.” |