Asking prices in the UK continued to increase in April but growth has slowed considerably and the housing market in Scotland is currently outperforming the rest of the country, the latest index data shows.
Prices increased by 1.1% in Scotland month on month and by 2.3% year on year to an average of £181,266, according to the Home.co.uk index while in Wales they were up by 0.8% and 1.6% respectively to £188,445.
In England asking prices were up 0.6% month on month and year on year by 2.8% to an average of £304,740 but there is considerable regional variation with prices in Greater London flat month on month and down 1.6% year on year to £544,103.
The figures suggest that it is the markets in the East of England and the East and West Midlands that are keeping the national average from falling further. In the East of England asking prices were up 0.8% month on month and 8.1% year on year to £357,927, in the East Midlands by 0.9% and 5.7% to £219,415 and in the West Midland by 1.2% and 4.5% to £231,944.
‘Whilst this month’s price rises indicate that there remains much confidence and momentum, the transition towards a period of lower year on year price growth appears complete. Moreover, rising inflation due to a weaker post Brexit pound means that overall capital values are not rising in real terms,’ said Doug Shephard, the firm’s director.
Prices are always stronger in the spring and early summer. However, looking towards the autumn and winter, we expect price falls in London and the South East to impact significantly on the national figures. In May 2016 the annualised rate of increase of home prices was 7.5% but today the same measure is just 2.8%,’ he pointed out.
He reckons that home prices in the South West and the West Midlands will also benefit from supply restrictions which are down 6% and 8% respectively, over the coming months and as marketing times in both regions are lower than in May last year he predicts that these markets will remain positively robust going forward.
The North West leads the most northerly regions with both strong price growth and improved marketing times since last year. Yorkshire is looking more invigorated too, with a typical time on the market of 85 days, making it the most dynamic property market in the North.
He also pointed out that as rents fundamentally underpin house prices the regions to watch are Wales, Yorkshire and the West Midlands, up 11.5%, 9.2% and 7.8% year on year respectively. ‘We expect considerable buy to let investment in these locations going forward,’ said Shephard.
‘The UK property market is heading into a period of much lower growth overall. The national growth figures will remain muted due to the poor performance of London, which could last for some considerable time,’ he added.