Jan 2019 House Price Watch

House prices almost unchanged over the past year — average annual rate 1%

House prices down on average -0.5% in the past month

 

Across the major indices monthly house prices are down on average (-0.5%).  Annual house price growth slows further to (1.0%).  This is the slowest rate of average annual house price growth since January 2013.

 

HomeOwners Alliance says:  “On a national level, the annual rate of house price growth is the slowest it has been in five years with almost no movement in house prices over the past year.  Both buyers and sellers continue to have cold feet while the direction of Brexit remains unclear. This chilly climate looks set to continue until greater political and economic certainty can be provided.”

 

Regionally, annual house price growth is highest in West Midlands and Wales and slowest in London and North East

 

Rightmove comments on the varied regional picture:  “As we move from the old year into the new, the headline summary is that the Christmas slowdown came early and the hangover lasted a few days longer into the New Year than usual.  Agents report activity is now picking up, though when you dig underneath the national averages, there is a variable picture depending on where you are in the country. Given the market backdrop and ongoing political turmoil, more challenging conditions in London and nearby regions mean they appear to have had a slower start to the year.  This year’s buyers have the added spur of the slowest rate of new year price increases for seven years.”

 

Home sales dip in December but are higher than a year ago

Home sales are down 0.1% between November 2018 and December 2018. Transactions in December are up 3.6% year on year. (HMRC Seasonally adjusted residential property transactions)

 

Buyer enquiries, agreed sales and new instructions all decline

Demand is down for five successive months and new seller instructions are down over the last six months.  As a result, average stock levels on estate agents’ books are close to record lows.  (RICS Dec, 2018 UK Residential Market Survey)

 

The Royal Institution of Chartered Surveyors says:   “It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property was subdued.  This is also very clearly reflected in a worsening trend in near term sales expectations.  Looking a little further out, there is some comfort provided by the suggestion that transactions nationally should stabilise as some of the fog lifts.”

 

Further commentary on the forward outlook from Nationwide and Halifax:

Nationwide: “Annual house price growth almost ground to a halt in January.  Indicators of market activity such as the number of transactions and the number of mortgages approved for house purchase have remained broadly stable in recent months but forward-looking indicators suggest some softening is likely.  In particular, consumer confidence weakened and surveyors reported a fall in new buyer enquiries towards the end of 2018.”

 

Halifax: “Attention will be drawn towards the monthly fall in house prices.  However, the bigger picture is actually that house prices have seen next to no movement over the last year.  There is no doubt that the next year will be important for the housing market with much of the immediate focus on what impact Brexit may have.  More fundamentally it is key underlying factors of supply and demand that will ultimately shape the market.”

 

To see how we calculate our House Price Watch click here and to see previous reports click here