Homes in Hants

The total stock of property for sale in the UK has fallen to a new post economic crisis low with 45% fewer properties for sale than in November 2007, according to the latest index report.

It also shows that average annual asking price growth in England and Wales increased further to 7.3%, driven by lack of supply with the shortage affecting all regions but particularly London, the South East and the East of England.

Consequently, prices in these regions continue to rise at an alarming rate, well ahead of the national average. Over the last 12 months, asking prices in London, the East and South East of England have risen by 12.5%, 9.8% and 9.4% respectively. Meanwhile, the number of properties coming on to the market in the same regions is down by 15%, 13% and 10% respectively.

However it is not a uniform picture, according to the asking price index from Home.co.uk. Prices have slid in the North East and Yorkshire during the last month. Asking prices were down 0.1% month on month in Yorkshire and Humberside and down 0.5% in the North East where prices are also stagnant compared to a year ago.

Indeed, as a whole prices in the northern regions and Wales continue to stagnate. Annualised price changes for the North East, North West and Yorkshire of just 0.0%, 1.2% and 1.9% respectively indicate that demand levels remain depressed relative to the South.

Welsh property has fared a little better with home prices rising by 2.7% over the last year, but still a long way behind the mix-adjusted average price rise for England and Wales of 7.3%.

Overall, the current mix-adjusted average asking price for England and Wales is now 25.8% higher than it was in November 2010. Further upward pressure on this headline figure will come from London, the East and South East of England over the next year.

North of the border, Scottish home prices are rising more quickly, up 4.7% over the last year and 6.4% since November 2010. Sellers there are obviously patient, as the typical time on market is 114 days, 16 days longer than the figure for England and Wales.

The Aberdeen property market has been adversely affected by plunging oil and gas prices, and properties on the market there have been piling up. Meanwhile, the Edinburgh market is experiencing a boom, with prices driven up 13% over the last year and supply falling away. Further south, the northern English regions show relatively poor home price growth.

 Of those, the North East property market has suffered the most over the last five years. Prices are falling in many towns in the region, such as Billingham, mainly due to the downturn in the petrochemical industries. Crime and joblessness continue to adversely affect many of the larger urban areas. However, pockets of significant growth do exist, such as prosperous market towns like Yarm.

The South East continues to show massive price growth and the report says that this overheating region has been the fastest moving property market in the UK since February, when it displaced London from pole position. The typical time on market for unsold property there is just 63 days. Correspondingly, prices have risen 9.4% over the last 12 months and 33% over the last five years.

There are ever fewer properties for sale is because there are fewer owners who wish to sell, according to Doug Shephard, the firm’s director.

‘The last large dip in the number of properties for sale was in 2010, when 30 months of perpetual monthly price falls had eroded confidence in the market. Thanks to slashed interest rates, vendors could afford to sit on their hands and wait for better times,’ he explained.

‘The better times came, for London and the South certainly, and the number of properties for sale consequently grew to a recent maximum in the summer of 2011. Since then, aside from a little seasonal variation, we have observed a constant downward trend to the current new low,’ he pointed out.

‘Over the same time, we have witnessed a change in tenure in UK property. Vast numbers of properties have been transferred into the Private Rented Sector (PRS) as more investors, large and small, have jumped on the buy to let bandwagon. This is perfectly understandable as savings in the bank pay near zero interest and stock exchanges the world over suffer from frightening volatility, but rented property pays a yield,’ he added.

‘The growth of the PRS has actually accelerated since the financial crisis, and now adds around 1% of the UK housing stock to its ranks each year, according to a recent House of Commons report. The same report states that we may be looking at a long term structural change to the housing market,’ Shephard pointed out.

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