Asking prices hit all-time high in the UK but sales agreed down

Asking prices in the UK have increased to an all-time high of £308,075 in May, up 0.8% month on month, but sales are slowing, the latest index shows.

Year on year asking prices increased by 1.1% nationwide but the East Midlands, the West Midlands and Wales have seen them rise by over 4%, the data from property portal Rightmove also shows.

The firm reveals that a record number of visits to Rightmove indicate strong interest in property, but warns that there is uncertainty and stretched affordability which have dented sentiment leading to more hesitant buyers and sellers in some areas.

Also, the number of sales agreed by estate agents so far in 2018 is down 5.4% on the same period in 2017 with London and commuter belt down most, with the number of year to date sales agreed versus 2017 down 8.5% in the South East, 7.8% in the East of England, and 6.9% in Greater London compared with a national fall of 5.4%.

Miles Shipside, Rightmove director, pointed out that different markets are still operating at different speeds, and the overall picture is one of a less buoyant market both in terms of price growth and number of sales agreed.

Miles Shipside said:

‘After six years of continual year on year price growth the current market is becoming increasingly price sensitive, with new to the market sellers being limited to an average asking price growth of just 1.1% over the last year.

‘This is in spite of there being plenty of historically cheap mortgage products around for buyers who meet lenders’ criteria. Sellers need to pitch their price at a tempting level to entice buyers, as while there are signs of strong demand there appears to be hesitation among some buyers to commit.’

A lack of stock on the market means that agents in some areas report that the right property at the right price is still selling briskly. Indeed Rightmove has seen record visits in the first four months of the year showing that interest in property remains robust.

Month on month the biggest increase was in the West Midlands with a rise of 2.6% to £225,469 and year on year prices were up 4.3%. In the South West monthly figures rose by 1.6% and annually 2.9% to £308,750 while in Wales they also increased by 1.6% month on month to £192,422 with an annual rise of 4.3%.

Asking prices increased by 1.2% in the East of England and Yorkshire and the Humber to £357,680 and £190,346, up 1.7% and 3.9% respectively year on year. The East Midlands recorded the highest annual growth of 4.8% with asking prices also up 0.9% month on month to £223,266.

In Scotland asking prices increased by 0.4% month on month and by 2% year on year to an average of £154,472.

Month on month the only place to see asking prices fall was the North East with a decline of 0.3% to £148,810 and year on year London and the South East saw prices fall by 0.2% to £637,746 and 0.1% to £411,761 respectively.

Miles Shipside said:

‘The last time the South East recorded an annual price fall was in 2011, indicating that the softening in the London market is now spreading to its commuter belt, while there are signs that Inner London may be closer to a price recovery.

‘While this gives buyers in the South East the opportunity to negotiate prices down, in some of the more buoyant areas of the country the options to do so are more limited by a shortage of suitable properties on the market.’

The widening gap between asking price and sold price will only result in a further decline in buyer interest and a continued market slowdown, according to Russell Quirk, chief executive officer of Emoov.

Russell Quirk said:

‘There is still an appetite for homeownership amongst UK buyers evident by the record number of visits to Rightmove, but a lack of commitment is resulting in a reduction in the number of sales agreed.

‘This is hardly surprising when you consider the reality gap between the expectations of stubborn sellers and the current market climate. While actual price growth is remaining somewhat static, over optimism on the side of UK home sellers is continuing to push asking prices ever higher.’

Kindly shared by Property Wire