Asking prices continue to rise across most of the UK but the supply drought it over with more properties for sale coming onto the market, according to the latest index report.
However, Greater London and the South East of England have seen asking prices fall in the year to June 2018, down by 2.4% and 0.1% respectively, the data from property firm Home.co.uk shows.
Even on a month on month basis, these two regions are underperforming with asking prices unchanged in London compared with May at an average of £530,762 while in the South East they have increased on a monthly basis by just 0.9% to £404,862.
Asking prices in England and Wales increased by 1.4% year on year to an average of £310,240 while in Scotland they were up by 1.6% to £185,229.
But it is the supply changes that are most significant to the housing market, according to Doug Shephard, director of Home.co.uk. He explained that the property drought that has helped drive prices to notable highs over the last five years has come to an end.
‘Supply is up considerably on last year, especially in post-boom regions, and properties are spending longer on the market overall,’ he said.
The index figures show that supply changes show a clear market shift compared to a year ago, up by 11% across the UK, with the biggest increases found in the East of England with a rise of 20% and the South West up 21% year on year.
The total stock of properties on the market in England and Wales continues to rise, up 8.5% year on year and is now at its highest level since July 2015. In a counter trend, the number of rental properties entering the market is down 12% compared to a year ago.
The research also shows that the typical time on the market continues to rise in London, up 14%, in the South East with a rise of 15% and East the East of England up 17% year on year.
Indeed, the typical time on the market for England and Wales is now 81 days, three days more than in June 2017.
Shephard pointed out that price cutting has also surged with the number of on market reductions in May reaching a level last seen in October 2012. ‘These metrics clearly show that now, overall, the market is entering a slowdown phase in the property cycle. In short, the downturn that started when the London bubble began to deflate has now spread across sufficient regions that the national figures reflect the same,’ he said.
‘However, this message has not yet reached many of the vendors that placed their properties on the market last month with optimistically high prices. Of course, there are areas where property prices are still in their ascendancy in real terms and even some where they have yet to really take off such as the North East. However, they are few and becoming fewer,’ he explained.
He added that for the time being, Scotland, the North East, the West Midlands, Yorkshire and Wales are still gaining momentum. ‘Prices in these areas will therefore remain fairly robust for the remainder of the year. Albeit, judging by price growth already accrued, the West Midlands will be the next region to join the growing list of slowing areas, perhaps even towards the end of the year,’ he concluded.