Strong regional market performances outside of London and the South East are supporting the national property asking price growth in the UK, the latest index shows.
Asking prices increased by 3.2% in England and Wales in October and by 3% in Scotland year on year but in Greater London they are down by 0.7% on an annual basis, according to the data from Home.co.uk.
Annual growth is led by the East Midlands with prices up 6.6% to £225,258, followed by the East of England up 5.3% to £361,073, then the West Midlands up 5.8% to £238,829 and the South West up 5% to £324,739.
Asking prices were up by 4.5% year on year in Yorkshire and the Humber and in the North West to an average of £189,535 and £195,214 respectively, up by 3.2% in the South East to £407,550, up by 2.9% in Wales to £192.133, but by just 1.4% in the North East to £157,772.
On an month on month basis it was more of a mixed picture with asking prices up 0.4% in England and Wales to an average of £307,424 but down by 0.1% in Scotland to £183,927.
The biggest monthly gain was 1% in the South West and the West Midlands while they increased by 0.9% in the East Midlands and 0.7% in the North West and the East of England.
The index report says that overall the North West and Yorkshire continue to gain additional momentum and this will help boost national figures going forward and the North East and Wales show improved confidence too, both displaying increased momentum but improvements are cautious and incremental thus far.
According to Doug Shephard, director of Home.co.uk, overall, the UK property market is showing remarkable resilience and stability despite significant political uncertainty and a raft of costly disincentivising legislation.
He pointed out that in Oct 2016 the annualised rate of increase of home prices was 4.4% and a year on it has hardly changed at 3.2% with a third month in a row of declines in Greater London pushing the national average down.
The data also shows that the typical time on the market in England and Wales increased by two days to 89 days, two days less than in October 2016 and the total number of properties on the market in England and Wales remains down by 3% year on year.
Shephard said that the cool down in London had to happen and the process is not due to Brexit as it had begun long before the vote to leave the European Union. ‘Five years of massive house price inflation inevitably ended in the spring of 2016 with the beginning of the current corrective phase. Prices, of course, are not plummeting in the capital and surrounds, but rather sliding gently whilst monetary inflation does the rest,’ he explained.
‘Indeed, while interest rates remain ultra-low there is no panic, no rush for the exit. Supply is up on previous years but is not in any way extreme. Just enough to prevent further price rises in the immediate future. The South East and the East hit their price ceilings later than London did but the pattern is very similar and we expect prices to go sideways for some time in these regions. Supply has already risen and these markets are now slowing down from their previous feverish pace,’ he said.
‘On the other hand, the trends indicate that the northern markets look poised to put in the best performances they have shown for many years. The North West and Yorkshire are entering a boom phase, followed by the East and West Midlands which are currently the UK’s most vibrant regional property markets,’ he pointed out.
‘Looking towards 2018 it is as yet uncertain how far the London correction will go, but we do not expect major falls as the weak pound is attracting significant foreign investment in the region most favoured by international buyers. But despite this and talk of raising interest rates, the UK property market is showing remarkable robustness and looks set to continue to do so for the immediate future,’ he concluded.