29 June 2009Scarcity of housing props up house prices
Growth in demand for housing strongest in southern England
| Summary | Apr-09 | May-09 | Jun-09 |
| Monthly price change (%) | -0.3 | 0.0 | 0.0 |
| 12 month price change (%) | -10.1 | -9.6 | -8.7 |
| % change in new buyers registering with agents | 6.0 | 6.0 | 4.6 |
| % change in volume of property listings | 1.6 | -0.2 | 0.8 |
| % change in sales agreed | 14.9 | 9.4 | 6.4 |
| Average time on the market (weeks) | 10.4 | 9.9 | 9.4 |
| % of the asking price being achieved | 89.6 | 90.3 | 91.0 |
| % postcode districts with price decrease over month | 32 | 13 | 3 |
Rising sales volumes, dwindling supply and continued increase in demand...
For the second month in a row, house prices remained unchanged in June. Rising sales volumes together with a dwindling supply of housing for sale and a continued increase in demand are underpinning pricing levels.
The last 6 months have seen the volume of buyers grow by 36%, this compared to a 6.4% increase in the number of homes for sale. In London, the increase in demand for housing (+52%) has been almost tenfold compared to the growth in the supply of homes for sale (+5.6%).
A pick up in sales also continued this month. The latest survey shows that volumes were up in June by 4.6%, the fifth month in a row. Since the start of the year sales have risen by over 80% - albeit off a low base.
And the other lead indicators...
Other leading market indicators reflect an improvement in sentiment with the average time on the market down to 9.4 weeks from a recent high of over 12 weeks in January 2009.
The proportion of asking price being achieved has also increased - for the fourth month in a row - from 88.3% in February 2009 to the current 91%.
New buyer registrations rose by 4.6% in June but were down compared to the previous 2 months. A trend likely to continue as we head towards the summer.
Across the country...
On a regional basis the increase in demand over the last 6 months has not been uniform with a clear split between southern England and the rest of the country. London and the South East have seen a respective 52% and 46% rise in demand over the first half of the year compared to a 19% increase in Wales and a 20% rise in the North East.
This month's survey was based upon 6,160 responses from 1,802 agents and surveyors across all 2300 postcodes in England and Wales.
chart 1: % asking price being achieved
"The proportion of the asking price achieved rose to 91% in June from a recent low of 88.3%. As long as this measure remains below 93% prices are likely to remain static or under downward pressure."
chart 2: Time on the market (weeks)
"The time on the market has fallen for the last five months. For those properties that are selling the current average time on the market is 9.4 weeks, down from a recent high of 12.3 weeks seen in January 2009."
chart 3: % of postcodes registering price falls
"Agents have spent the last 2 years re-pricing the market to a level where sales are starting to occur once again - albeit off a very low base. With sales volumes up for the last few months so the downward pressure on pricing has abated for now."
