The average residential property asking price in Britain increased by just 0.4% this month as Brexit uncertainty ate into the start of the traditionally busier spring housing market, according to the latest index report.
It is the lowest average monthly rise at this time of year since 2011, and considerably lower than the 0.9% average over the last seven years, with London being the main drag on the market, the report from property portal Rightmove shows.
Asking prices remain more buoyant outside London with nine out of 11 regions seeing a rise but overall more buyers are hesitating due to an increase in Brexit uncertainty and the number of sales agreed by estate agents in February was 7% below the same period in 2018, compared with the 4% annual fall recorded in January.
The data suggests that the market is weakest in the south of the country. Asking prices in London fell by 1.1% month on month and were down by 3.8% year on year to £607,557 while in the South East they fell by 1.5% year on year but increased on a monthly basis by 0.7% to an average of £398,184.
In the South West of England asking prices increased by just 0.1% on an annual basis and by 1.6% month on month to £302,149 while in the East of England they fell 0.7% year on year and increase by just 0.6% month on month to an average of £349,022.
Further north the weakest market is the North East with asking prices up by 0.5% year on year but down by 1.3% month on month to an average of £149,398. The strongest market in England was the North West with an annual rise of 3.4% and a monthly rise of 2.2% to £196,350.
In Yorkshire and the Humber prices increased by 3.4% year on year and 1.3% month on month to £190,164 while the market is resilient in the Midlands, up by 2.8% year on year and 1.5% month on month to £226,028 in the West Midlands and up 3.1% year on year and 0.6% month on month in the East Midlands to £224,725.
The market was strong in Scotland and Wales. In Scotland asking prices increased by 2.5% on an annual basis and by 3.1% month on month to an average of £153,174 while in Wales they increased by 3.8% year on year and 1.5% month on month to £194,842.
‘While March marks the start of spring, temperatures have yet to rise in the housing market. Buying activity remains cooler than usual, with hesitation as some buyers await a more settled political climate,’ said Miles Shipside, Rightmove director and housing market analyst.
‘There’s greater resilience the further away you get from the London market, and there’s a sound bedrock of demand for the right property at the right price, reinforced by ongoing housing needs combined with cheap mortgage borrowing,’ he pointed out.
He also pointed out that London prices are still 68% higher than 10 years ago and buyers looking for prices to settle while in contrast, the North East has seen new seller asking prices up by just 8% in the same time span.
‘London and some of its commuter belt are suffering from a post-boom hangover, with prices now having to be far more sober to attract buyer interest. In contrast, North East prices never had the opportunity to become intoxicated by the capital city’s heady mix of high demand, low interest rates and higher salaries,’ he added.
The report also shows that search activity on Rightmove remained steady, with the number of visits to the website staying level in the year to date. Shipside believes that this indicates that home movers are keeping a watching brief which could lead to an eventual bounce if and when the uncertainty abates.
‘The closer you get to the wire without the clarity of an agreed way forward, the greater the propensity for buyers to wait and see rather than acting now. This could be a temporary pause, and indeed market slowdowns at election time and around the original referendum result bounced back pretty quickly,’ said Shipside.
‘Markets and people do not like uncertainty, though while sales agreed numbers are down by 7%, that means they are still running at 93% of last year’s levels. Most potential buyers are getting on with their lives or seeing a price lull as an opportunity to get onto the housing ladder or move to the next rung, with average national asking prices being 0.8% cheaper than a year ago,’ he added.
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