Affluent areas of London only locations to buck price falls in 2011 - National housing market set for 3% price falls in 2012
Issued: 26 December 2011
| Summary | Oct-11 | Nov-11 | Dec-11 | Change |
|---|---|---|---|---|
| Monthly price change (%) | -0.2 | -0.2 | -0.2 |  |
| % change in new buyers registering with agents | -0.2 | -2.2 | -6.3 |  |
| % change in volume of property listing | 1.3 | -0.8 | -3.4 | |
| % change in sales agreed | 6.3 | 4.6 | -0.9 | |
| Average time on the market (weeks) | 9.8 | 9.9 | 10.1 |  |
| % of the asking price being achieved | 92.4 | 92.5 | 92.3 | |
| % postcode districts with price increase over month | 6.5 | 5.0 | 2.0 | |
| % postcode districts with price decrease over month | 34 | 32 | 33 | |
Results at a glance
- Average prices moved downwards by 2.1% over the year, this compared to a 1.6% decline in 2010. The strength of the London market, where prices were up 1% and by more than 5% in the most affluent postcodes, has flattered the national picture.
- Over the last 12 months 78% of postcodes across the country have registered price falls. This in contrast to London where, over the same period, prices have risen across 43% of the capital.
- Following a weak end to 2010, demand over the first half of 2011 bounced back with the number of new buyers rising by 14%. Over the second half of the year new buyer registrations (demand) fell by 11% as uncertainty over the economic outlook grew. New buyer registrations fell by 6.3% in December.
- Overall the supply of housing for sale grew by 19% over 2011 – with all the growth coming out of the first half of the year. But with mounting uncertainty over the economic outlook, the number of would-be buyers prepared to sell has fallen. In December the number of homes coming to the market fell by 3.4%.
- The time on the market has been increasing for the last five months and currently stands at 10.1 weeks, up from a recent low of 9.4 weeks (July 2011).
- Around country, the time taken to sell ranges from 6.5 weeks in London to a high of 13 weeks in the East Midlands.
- The proportion of the asking price achieved has remained largely unchanged over the year tracking in the range of 92% - 93%. But in the North of the country it has started to move lower – suggesting an above average acceleration in price falls over 2012.
- As we head into 2012 low interest rates and housing turnover will continue to act as a support to prices but the overall trend will be downwards. We expect house prices to fall by 3% by December 2012. But there will be continued demand for rental properties; we forecast rental values to rise by 2% over the next 12 months.
Figure 1“The proportion of the asking price achieved has started to slip back and stands at 92.3%. The further it falls the greater the decline in prices. The time on the market has registered a small increase to 10.1 weeks with some major regional variations.” |
Time on market and % asking price achieved |
Figure 2“The balance between supply and demand leads underlying house price changes by 3 months. The improved balance over the first half of 2011 led an improvement in the underlying rate of growth. The balance is now moving into negative territory suggesting a pick up in price falls in the months ahead.” |
Supply demand balance leads price changes by 3 months |
Figure 3“Figure 3 shows the proportion of postcodes registering higher and lower prices over time. The balance of change swung into negative territory over the autumn of 2010 but the extent of price changes has slowed as supply has tightened. Prices were down across 33% of postcodes in December 2011.”
|
Proportion of country registering higher and lower prices |
