Home.co.uk's Asking Price Index for December has revealed that the unsold sales stock count for England and Wales plummeted by around 30,000 properties during the last month, making the current total 465,129 - the largest such fall since December 2019.
As a result, agents' portfolios have been thinned out, reducing the national stock level despite increased supply.
Pricing remains tight, however, with all regions indicating average price reductions, the magnitude of which is more than merely seasonal. Vendors are clearly motivated and therefore pricing competitively.
Overall, the vital signs of the UK property sales market confirm that it is operating normally. Property throughput is currently higher than many of the pre-COVID years. Room for further price growth appears limited due to affordability constraints.
Average asking prices in England and Wales remain notably lower than the peak pricing observed in the summer months of 2022 and have continued their seasonal decline, falling by 1.0% since last month across England and Wales; this is a drop that slightly exceeds purely seasonal variance. Annualised home price growth reduced to just 1.7% overall.
Whilst expectations of lower interest rates going forward have buoyed confidence in the market, fears of increased taxation and restrictive legislation persist, especially among landlords.
Consequently, we expect landlords to continue to offload their least profitable properties, thereby adding to the sales supply but reducing rental property availability. On a regional basis, yields continue to be better in the North than in London and the South.
UK asking rent growth is now sub-inflation (0.8%).
But it is important to reiterate that this annualised national growth figure obscures the enormous differences regionally between Greater London at -1.9% and the two best performers, East Midlands (+12.7%) and Yorkshire (+11.0%). This is due to the predominance of rental properties in the capital.
The annualised mix-adjusted average asking price growth (sales) across England and Wales is now 1.7%; in December 2023, the annualised growth of home prices was 0.1%.
