LSL reports that, during March, the average house price settled at £303,073 - a monthly change of 0.1%. On an annual basis this is 0%.
Peter Williams, Chairman of Acadata and John Tindale, Acadata housing analyst, comment: "March is the traditional start to the home-buying season and, as such, prices normally move up on the quiet winter months. However, this year March house prices have risen by only the narrowest of margins, up by £350 in the month, or just +0.1% on average.
Indeed, we have only had tiny increases over these last months, up by just 0.8% over the last four months. Price movements over the whole of the last year have been relatively subdued, with the monthly change in the average price being less than ± 0.5% on nine occasions. On this basis, the England & Wales market continues to be close to static – though of course there are significant regional variations.
On an annual basis, i.e. over the last twelve months, average prices have fallen by a minimal £60, or 0.0%, and now stand at £303,073. However, with areas such as Kensington and Chelsea recording a fall of £800k in its average price over the year, one senses the turbulence in the housing market that is bubbling away beneath the surface.
The Housing Market
If the spring is failing to deliver significant price increases, it seems unlikely that the picture will change much through the year. Neither the Bank of England mortgage approvals data nor the RICS residential market surveys of February - both forward indicators of the market - gave much hope for any significant change in housing sentiment. Indeed, since then the Brexit position has worsened, with enhanced prospects of longer delays before there is an outcome adding to the uncertainty, and requiring households and companies to make continuing adjustments so as to manage the situation. There was more activity in terms of transactions - but this did not translate into significant price movements.
Clearly, there are significant regional and local variations in these trends. The reality of the England & Wales market is that it has fragmented into many small localised sub-markets, each with their own characteristics. This highlights the need for buyers to think very carefully about the current and future demand for their chosen property. Some homes have an enduring appeal, reflecting location, style, size etc. despite market fluctuations, and these will normally carry a premium price.
The new-build market has become embroiled in a number of controversial issues of late – related to the quality of homes being produced, the sale of leasehold houses and questionable ground rent clauses. Given that new-build had taken a bigger proportion of the market in recent years – reflecting not least the success of the government’s Help to Buy scheme – this is unfortunate. While the government is looking to take action, the reality is that this is taking time. It needs to be resolved with some urgency so that the market can move forward.
Housing Transactions
In March 2019, there were an estimated 71,500 transactions – based on Land Registry counts for England & Wales – which is a +14% rise on our estimated February 2019 figure of 62,500 sales. However, a seasonal rise in sales volumes of +28.5% would be expected in March, so in fact the increase of +14% represents a -14.5% reduction in transactions on a seasonally adjusted basis. However, more positively the estimated 71,500 sales in March 2019 are +2% higher than one year earlier.
On the basis of our sales estimates for the first three months of 2019, transactions for England & Wales in Q1 2019 total some 192,000 sales, +1.4% up on the 2018 total.
Annual Price Trends
On an annual basis, prices in February 2019 decreased in England & Wales by some £1,275, or -0.4%, this being the second consecutive month the annual rate has been negative, something that last occurred in March 2012. In January 2019, the annual rate was -0.5%, so the rate of house price growth in February has increased by 0.1% from the previous month. This is only the fourth month in the last twelve in which the annual rate has gained ground. In February 2018, the annual rate of house price growth was 3.7%, so the pace of growth has fallen by 4.1% over the last twelve months.
