Cautious sellers cut housing supply

Home.co.uk also found that overall annualised price growth in England and Wales slipped a little further into the negative to -0.3%, despite a small month-on-month rise of 0.2%, according to Home.co.uk's Asking Price Index for March.

Spring optimism lifted prices over the last month in Wales, Scotland and all English regions apart from London (no change) and East of England (-0.1%). London's annualised losses edged back from 3.3% to 3.2% and remains at 6.9% since the start of the slide in May 2016. Asking price falls in the South East have also eased slightly (2.3% year-on-year) but worsened markedly in the East (2.7%) where the slowdown is really beginning to bite. The Typical Time on Market for unsold property in the East of England has risen by 46% since March 2018.

In contrast to the regions undergoing price corrections (Greater London, the South East, the South West and East of England), northern and western regions still show positive growth. The leader is Wales with annualised growth of 5.8%, followed by the West Midlands with 4.9%. The North West and Yorkshire have also seen growth in their average asking prices, both by 3.4%, over the last twelve months but momentum is waning steadily in both these regions.

The West and East Midlands markets continue to slow as evidenced by their Typical Time on Market increases (15% and 14% respectively). Supply in both regions is up 4% and 8% respectively and we expect supply and stock levels to increase further over the coming months. Moreover, we anticipate that these two regions will be the next dominoes to fall (East Midlands first), consistent with our regional market trend analysis.

Overall, supply of property for sale entering the UK market is down by -4% (showing increased caution on the part of vendors) while the total stock for sale has increased by a reasonably benign 6.4% year-on-year.

In March 2018, the annualised rate of increase of home prices was 2.0%; today the same measure is -0.3% and continues to trend further below zero.