House price growth stalled in September – Land Registry
Agents are acknowledging that ‘change is coming’ to the housing market after the latest Land Registry House Price Index showed house price growth has slowed annually and was flat on a monthly basis in September.
The Land Registry figures show average house prices in the UK increased by 9.5% in the year to September 2022 to £294,559
This was down from 13.1% in the year to August 2022.
The house price inflation rate was flat on a monthly basis.
It is highlighted in the report that these figures do coincide with the end of last year’s Stamp Duty holiday in September 2021.
Land Registry data on sales registered in July 2022 show a 133.6% annual increase across the UK.
This is also compared with the end of the initial Stamp Duty holiday in July 2021.
Commenting on the data, Tom Bill, head of UK residential research at Knight Frank, said price growth is unlikely to remain flat for long.
Tom Bill said:
“Prices fell last month after the mini-Budget caused mortgage rates to spike but house prices are not necessarily now on a steeper downwards trajectory.
“We expect mortgage rates to come down and a sense of stability to return as financial markets respond positively to the new government.
“However, the lending landscape is shifting after 13 years of ultra-low borrowing costs, which we believe will put enough downwards pressure on prices so that they return to their summer 2021 level.”
Jean Jameson, chief sales officer at Foxtons, said the data reflects extra caution in the market as customers “choose between buying an asset at a higher rate and dealing with record-breaking rent in the lettings market.”
Jameson added:
“However, London is insulated by its international appeal, and house prices have remained high here.
“As Help to Buy finished in October, our new homes team have seen developers re-focus on the investor market, with increasing demand from overseas investors due to the exchange rate.
“Foxtons Private Office, whose clientele includes domestic buyers in international business as well as international investors, have seen higher volumes of property going under offer this October than in 2021.”
Agency trade body Propertymark adds that a buyers’ market is now emerging.
Its chief executive Nathan Emerson said:
“Things are changing, and our members are seeing a steady shift back towards a buyers’ market with the biggest proportion of sales now being agreed at asking price or below.
“Demand is continuing to outpace supply and despite buyers negotiating harder with higher borrowing rates to consider, realistically priced homes are still selling.”
The Land Registry data was released as the latest inflation figures were revealed, putting the cost of living measure at a record high of 11.1%.
Iain McKenzie, chief executive of The Guild of Property Professionals, said:
“On a day that has seen inflation rise to a 41-year high, it is reassuring to see the property market is still holding steady.
“It’s worth remembering, however, that it often takes a few months for any disruptions in the economy to trickle down to the cost of housing.
“There are signs that a slowdown is settling in, as the annual percentage growth cools for another month. To put it in context, the average house still costs £26,000 more than this time last year.
“House prices are influenced by more than just changes to economic policy. Housing supply and demand is also a major factor, and estate agents are only just starting to see more properties entering the market after more than two years of unprecedented demand.
“The next few months are going to be critical for the property industry. Measures are being taken by the government and the Bank of England to bring down inflation, and although this is currently resulting in the rise of interest rates and mortgage payments, the cost-of-living crisis must be brought under control.
“The property market and mortgage brokers are looking for stability, and first-time buyers also need that to feel confident that this is a good time to get their foot on the property ladder.”
Meanwhile, Propertymark member data for October showed the number of new buyers registering per member branch dipped to 64 in October – down from 83 the month before.
This is still close to October 2021’s figure of 67 and represents a 5% annual drop.
The average number of viewings per property were also down in October to just over three.
New instructions were down on average to nine per member branch in October, after rising to 12 in September, Propertymark said.
That is still in line with the average for the past 12 months.
The average number of properties available to buy per member branch also held steady at 30 in October.
The number of sales agreed per member branch dropped to seven in October — down from 10 in September when many rushed to purchase ahead of future anticipated rate rises, Propertymark said.
Its research found that 69% of branches had most sales agreed below asking price in October.
This compares to a low of just 15% in March but to a pre-pandemic average of 78%.
Kindly shared by Estate Agent Today
Main article photo courtesy of Pixabay
