Newly released data from Home.co.uk has revealed that reluctant vendors, spooked by the uncertainty surrounding a Halloween Brexit, are sitting on their hands and causing a massive drop in supply.
According to the research, the capital is not alone; sudden supply drops are apparent in many regions and, nationally, supply is down 17% year-on-year as approximately one in six vendors plays the waiting game.
Meanwhile, low and falling rental stock levels are initiating a surge in rent hikes, led by seven key boroughs. Wandsworth, Hackney, Haringey, Hammersmith and Fulham, Sutton, Brent and Islington are all showing double-digit rent inflation, yields are soaring and, consequently, property prices look set to surge over the next twelve months and beyond. In fact, asking prices are already beginning to follow rents upward in Wandsworth, Hammersmith and Fulham, Sutton, Brent and Islington.
Nationwide, home prices are holding remarkably steady, despite all manner of Brexit doom and gloom, and the supply drop will only serve to further support values. At the regional level, the property market presents a more mixed picture: positive growth is still present but waning in the recently booming northern and western regions (especially Wales) while the East of England remains in the grip of the inevitable post-boom price correction.
The South East also has yet to exit a period of negative growth but looks set to follow London on the road to recovery. Acute supply shortages will help to reinvigorate these markets.
Meanwhile, increasing Time on Market figures and vanishing growth indicate that the East and West Midlands property markets are heading for their respective price corrections. 2020 portends a painful period of correction after many years of excessive growth (36.7% and 35.0% respectively since October 2012), although the current drop in new instructions may forestall the inevitable correction by several months.
Thanks to more conservative home price rises in the northern regions over recent years, the risk of price falls looks relatively low going forward. For the time being, of all the regions, only Wales continues to show real growth (year-on-year home price increases above the official rate of inflation).
Annualised price growth across England and Wales has moved out of the red and now stands at +0.1%, after eight consecutive months of negative growth; in October 2018, the annualised rate of increase of home prices was 0.6%.