Reallymoving House Price Forecast September 2019: House prices to dip over next quarter

September 2019: The reallymoving House Price Forecast shows house prices to dip over next quarter but market continues to show resilience.

Headlines:

• House prices on course for small monthly falls over September, October and November
• This is mainly due to seasonality, with prices peaking in August and tailing off through autumn
• Housing market continues to show surprising resilience despite summer of political turmoil
• Annual growth will remain in positive territory throughout autumn 2019 according to the Forecast

Average house prices in England and Wales are set to see an average 0.9% monthly drop over the next three months, according to the reallymoving House Price Forecast released today, yet the market continues to show remarkable resilience in the face of political uncertainty.

Based on conveyancing quote data collected in June, July and August, average prices will dip by 1.4% in September, 0.3% in October and 1.0% in November, which can be attributed largely to seasonality as the market follows its usual pattern of peaking in late summer before tailing off through the autumn. As homebuyers register for quotes for home move services on the site typically twelve weeks before their purchase completes, reallymoving is able to provide a three-month property price forecast based on the purchase price agreed. Historically, reallymoving’s data has closely tracked the Land Registry’s Price Paid data, published retrospectively.

Graph 1: reallymoving House Price Index (England and Wales) including 3-month price forecast

Monthly price changes

Average values are set to fall by a total of 2.6% over the next three months (September to November 2019), which is largely due to the seasonality of the housing market which typically sees values decrease steadily towards the end of the year from an August high. When adjusted for seasonality and mix, average values show positive growth over the coming three months, which suggests the falls we’re about to see in real terms are seasonal rather than reflecting a drop in the underlying value of property.

Deals agreed in August will reflect a fall of just 1.0% when those sales complete in November, which indicates the housing market is continuing to hold firm, supported in part by a lack of stock available for sale.

Annual price changes

Year on year, house prices are on course to remain in positive territory throughout the autumn. A 3% annual increase forecast for September will be the highest rate of annual house price growth for almost a year, followed by 2.7% in October and 2.1% in November 2019.

Underlying conditions in the wider economy, such as low unemployment, low interest rates and rising household incomes continue to underpin the housing market and support steady year on year growth.

Regional 3-month price forecasts

House prices in Wales, Scotland and Northern Ireland are expected to continue their upward trajectory, with values forecast to rise by 8.7%, 3.8% and 1.9% respectively over the next three months.

England presents a more mixed picture, with prices set to fall across the north, declining in the North East, North West and Yorkshire & Humber, as well as in the South East (-1%), South West (-2.2%) and East (-1.8%).

London is set to see a moderate bounce of 1.5% overall in the three-month period from September to November, but a dip of 2.3% forecast for November suggests that buyers in the capital were more cautious in August, factoring in a buffer to protect them from future price falls.

Analysis and commentary

Rob Houghton, CEO of reallymoving, comments:

“Considering the current political situation, the UK housing market continues to show remarkable resilience. House prices are on course for minor monthly falls in September, October and November, but while the temptation is to attribute this to Brexit, in fact it is largely down to seasonality with the market following its usual pattern of peaking in August then tailing off steadily through autumn.

“The London market has proved to be most vulnerable to the political situation and the data suggests buyers were more cautious in August when No Deal Brexit rhetoric peaked, prompting a 2.3% monthly fall in prices agreed which will translate to completions in November.

“Nationally, annual growth is set to remain in positive territory throughout the autumn, indicating that people are continuing to press ahead with home moves and the underlying value of the housing market remains stable.”

Kindly shared by reallymoving.com