Thanks to continued low interest rates, significant demand remains evident despite the slowdown. Home values are also being supported by reduced supply owing to caution on the part of vendors. Moreover, price corrections in London and the surrounding areas are playing out in an orderly fashion. No sign of panic selling and certainly no major price drops.
In fact, the price correction in London that has proceeded steadily during the last three years appears to be complete. Both supply and residual stock levels have reduced and this has cleared the way forward towards more normal market conditions. Some momentum has already returned and we expect price growth to return next year.
The East, South East and South West are all undergoing price corrections. The South East may, like London, soon recover momentum now that affordability has improved.
However, the price correction in the East of England has longer to play out. Despite a small reduction in supply, demand is not yet sufficient to stabilise prices.
Both the East and West Midlands property markets are slowing and price growth has eased significantly after lengthy booms in both regions. Lack of affordability and excess supply look set to drive growth towards zero over the coming months.
Sub-inflation home price rises continue in the northern regions but momentum is waning and consequently growth looks set to tail off further. Of all the regions, only Wales has shown price increases above the rate of inflation over the last twelve months.
Annualised price growth across England and Wales remains in the red, -0.2%; in August 2018, the annualised rate of increase of home prices was 1.1%.
Home.co.uk data revealed that:
The mix-adjusted average home price in England and Wales slippped 0.1% month-on-month. Typical Time on Market lowers in London counter to last year's H2 trend, suggesting momentum is returning.
Supply of new instructions down in most regions but year-on-year increases for the month of July observed in the East Midlands (+1%) and West Midlands (+6%), while there was no change in the North West.
Typical Time on Market for England and Wales is currently 93 days (median), nine days longer than in August 2018, making it the slowest August since 2013. National average price growth remains just into the negative (-0.2% year-on-year).
Typical Time on Market rises indicate the worst regional slowdowns are in the East of England (+14%), the East Midlands (+13%), the South West (+12%) and the West Midlands (11% year-on-year).
East of England is the UK's worst-performing region, with the average asking price down by 3.0% over the last twelve months. Total sales stock levels across England and Wales slightly down by 3.6%.
