28 September 2009Scarcity in London & South East pushes prices higher
Reversal in sentiment poses greatest risk to housing
| Summary | Jul-09 | Aug-09 | Sep-09 |
| Monthly price change (%) | 0.0 | 0.1 | 0.2 |
| 12 month price change (%) | -7.7 | -6.7 | -5.6 |
| % change in new buyers registering with agents | 2.8 | 1.4 | 1.1 |
| % change in volume of property listings | 0.5 | 0.8 | 0.1 |
| % change in sales agreed | 6.6 | 4.8 | 2.5 |
| Average time on the market (weeks) | 9.0 | 8.7 | 8.6 |
| % of the asking price being achieved | 91.5 | 92.1 | 92.4 |
| % postcode districts with price increase over month | 10.3 | 11.1 | 15.2 |
House prices rise for second consecutive month...
House prices rose by 0.2% in September 2009, the second monthly increase this year. The year on year rate of growth currently stands at -5.6%.
A fundamental imbalance between supply and demand still exits and it is this continuing lack of quality housing for sale which is providing a support to prices.
A general lack of supply is set to remain a feature of the housing market over the medium term, but as prices rise and sellers become more demanding, so the recent pick up may well start to moderate over the autumn.
Lead indicators show signs of slowing...
A number of the survey's lead indicators are beginning to slow such as the average time on the market which now stands at 8.6 weeks and the proportion of asking price achieved which currently stands at 92.4%.
September's survey also shows a continuing decline in the number of new buyers registering with agents - from 8.5% in March down to a current 1.1%.
Price rises concentrated in small parts of the country...
Only 15% of postcodes saw any increase in price growth, while prices across some 84% of postcodes remained unchanged. 1% of agents reported price falls.
Over September house prices in London and the South East rose by 0.4% and 0.3% respectively. Outside southern England - where a lack of housing supply is less pronounced - a modest pick up in sales and improved market sentiment is supporting prices to the point where they have been tracking sideways.
In September price rises were limited to 4 regions - London, the South East, South West (0.1%) and the West Midlands (0.1%). In the North, Midlands and Wales, agents reported a much slower market with buyers looking to 'bag a bargain'.
Looking ahead to the autumn...
Looking ahead, it seems likely that low sales volumes and a general scarcity of housing for sale is a trend set to support prices in London and the South East for the remainder of the year. Further price rises are likely in the very short term. Across the rest of the country where the housing demand/supply imbalance is less pronounced overall prices are set to track sideways.
This month's survey was based upon 6,237 responses from 1,814 agents and surveyors across all 2,300 postcodes in England and Wales.
chart 1: % asking price being achieved
"The proportion of the asking price achieved rose to 92.4% in September 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 six months. For those properties that are selling the current average time on the market is 8.6 weeks, down from a recent high of 12.3 weeks seen in January 2009."
chart 3: % of postcodes registering price rises
"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 seven months and a growing scarcity of housing in some markets so prices are rising across a small proportion of the market."
